With the extreme volatility in the precious metals markets and an extreme supply squeeze, a new issue has arisen: where to get the most accurate spot prices, particularly for gold.
While traditionally a reliance on the London AM and PM daily fix was sufficient, in past years most traders would rely on a continuous digital feed coming from the CME Globex in Chicago. This is the “spot price” typically used for all trading in physical bullion in the numismatic market.
The problem now facing the market is there is very little physical gold left for immediate delivery. In this case, traders should look to the CME Globex Gold Futures Quotes found here: https://www.cmegroup.com/trading/metals/precious/gold_quotes_globex.html .
If you are negotiating a buy or sell of physical gold for future delivery, the most reliable reference price would be the current contract expiry price for the month in which the gold will be delivered.
As an example, Heritage is currently using the April contract price as their spot basis for selling. Please do your homework and read extensively on how gold futures contracts function if you are not familiar and plan to trade using their prices.
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Author: Patrick Ian Perez