Spot gold prices indicate what the market price of the gold is or it can also show what the price is based on futures contracts and their prices. The spot settlement is usually set for two days from the date of the trade at most. The spot price generally indicates what the market expects the price to be in the future. The theory says that the forward and spot prices difference should be the same as the finance charges, to which you can add the earnings which are due to the security’s holder, based on the model of cost of carry.

Futures contracts are made between buyers and sellers and they indicate the period of delivery and the size of the lot in advance. They decide on a fixed price for a certain date in the future. Whether the actual price is higher or lower than the agreed price will mean profit for one of the parties and a loss for the other.

The spot gold prices will go up or down based on the supply and demand on the market. These future contracts allow people to minimize the amount of risk they’re taking in case the gold price changes. While some people try to minimize their risks, others try to speculate and make money by trying to predict the future price of gold.

The commodity exchange markets can be used to determine the spot gold prices and this is where futures contracts can be traded. COMEX is the name of the New York commodity exchange where you can find out what are the spot gold prices.

The markets use computers to calculate the spot gold prices and they provide everyone with real time information on it. You can find information on all the futures contracts and the spot gold prices, for each second.