What does it mean when you say what is the spot gold price? Why are people always talking about it? How is it determined? These are the questions you might have when it comes to spot gold.
The spot gold price is the price at which gold is going for right now. That means what is the supply and demand for gold right now. The spot gold price does not tell you what people will pay for it next year, but right now, this very minute.
People are talking about it because the spot gold price affects the majority of things in the market and can tell you how markets are doing. If gold is soaring, it is likely that other commodities are doing poorly. If it is level or falling then markets are stable or rising. For further information click here.
The price is determined by the laws of supply and demand. Think about it this way, if I have 5 pieces of chocolate and 20 people want to buy it then I can keep raising the price to get to the point where 5 people will pay me the highest amount for it. This has been true with gold since the economic crash of 2008.
The price of spot gold is going nowhere but up for the time being. The instability of the world's economic standing ensures that.