Gold Market Price – Real-Time, Historical, Buy or Sell?

Gold Market Price – Real-Time, Historical, Buy or Sell?

We provide real-time gold market price, historical chart, and some other crucial information about this precious metal, including insights about future trends.

Gold Market PricePrecious metals are in focus for the last decade. The main reason for that is the raising price of gold as a consequence of global economic climate, general stock market conditions, and continues money printing in U.S., which drives the retail prices and inflation up. It is well known that investment in gold is the best way to avoid the negative impacts of high inflation on decreasing buying power.

Gold is not used only as a protection against inflation, but it is also used in jewelry and industry. One can easy conclude that we are facing higher demand than supply over this commodity in the recent years and that is what drives the gold market price higher and higher on the COMEX and other commodities exchanges around the world.

Spot vs. Futures Gold Market Price

When speaking about gold market price, there are actually two prices that are worth mentioning. One is the gold spot price and the second is gold future price. Spot price of gold stands for prompt agreements, immediate delivery, which is usually concluded within two working days from the trade date. The future price of gold is on the other side determined on the futures exchanges and stand for agreements with delivery some day in the future (could be 1 month, 3 months, 6 months, 9 months, 12 months, etc.).

Gold Trading Exchanges: COMEX/ NYMEX

While gold is traded all over the world on many international commodities exchanges, COMEX is known as the No. 1 supplier of spot gold market price. For those of you who are not familiar with the commodities exchanges, COMEX is actually part of NYMEX, a New York Mercantile Exchange. To be more accurate on spot and futures gold prices, spot price of gold is actually price of the most nearby monthly future for gold. COMEX also calculates each day’s closing price of the gold, which is determined as the average between the minimum and maximum trading price in the last 2 minutes of the closing session.

Real-Time Gold Market Price

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Ounce vs. Grams Unite Measure

The default currency for gold price is U.S. dollar, however it can be converted in real-time into any other global currency, like Euro for example. Another thing to consider when talking about gold market price is the unit in which it is expressed. Generally the price of gold is determined for 100 troy ounce bars and can be later recalculated into grams or kilos.

 

1 Troy Ounce = 31.1034768 Grams

 

Direct vs. Indirect Exposure to Gold

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It is not only the physical gold (bars, bullions, coins, or jewellery) you have to buy to get exposed to this precious metal. There are other possibilities as well.

One of the most commonly used alternative way to invest in gold is to gain exposure in Gold Exchange Traded Funds (ETFs). There are many Gold ETFs trading on stock markets. The ones with largest market capitalization are Exchange Traded Funds with ticker symbol: GLD, SGOL, and IAU.

All mentioned Exchange Traded Funds are traded on the New York Stock Exchange (NYSE Arca) and are all backed by physical gold, which represent an important security measure for investors. The purpose of gold ETFs is to track the gold spot price less expenses, which are around 0.4% yearly.

Where Could Gold Price Trend?

Nowadays gold is trading at all-time highs when speaking about the nominal gold market price at $1,800. This is due to the though global economic conditions, where gold soars comparing to some of the strongest national currencies like Euro and Dollar. You will find extremists projecting the future gold price well above $3,000 per ounce, even over $5,000 in the worst case scenario in case of euro/dollar collapse.

On the other side you will also find many financial analytics warning people, that gold could be the next financial bubble, since there are no real fundamental reasons for even higher prices of gold.

Things become very interesting when you start comparing historical gold price movement relative to other underlyings. Since 1900 gold prices have raised approx. 95-times (from $19 to $1,800), while the Dow Jones Industrial Average index (DIA) have raised 223-times (from 61 to 13,600). These entire figures drop dramatically if you adjust them with inflation, but Dow still outperforms the gold on the long-term, which is somehow expected; gold represents safe haven, while investment in stocks carries higher risk.

If you will calculate the Dow/Gold ratio, which tells you how many ounces of gold you need to buy one unit of Dow index, the current figure is around 7.5. This is well below the historical average around 10, while the long-term historical support lays around 5 (all figures calculated since 1900). What does this tell you? The stocks are rather cheap at the moment or the gold price is too high.

 

Dow Jones Industrial Average vs. Gold Ratio – Historical Chart
Dow/ Gold Ratio

 

Take a look at the historical chart of Dow/Gold ratio; you will be able to see that historically we had around 20 years of Dow outperforming gold, followed by 10 years of gold outperforming the Dow. We are now approaching the final stage of such 10 year period where gold did much better than stocks. It could happen that gold will stay in focus some more time now and then turn the cycle around at Dow/Gold ratio around 5. Stay tuned for updates.

 

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