Here you will find answers to the following questions:
1. What is included in the price of a gold bar?
2. What is the SPOT price?
3. What is the relationship between bar size and price?
At a glance
- The price of a bar consists primarily of the price of the gold itself (bullion accounts for about 92-96% of the final price) and other costs – including. production, transportation or insurance.
- The price of gold per 1 g varies depending on the size of the bar. Typically, the larger the bar, the cheaper 1 g of bullion.
- The basic unit of weight used in the gold trade is the troy ounce, or 31.1 grams. One-ounce bars are the most popular product on the market.
Gold is a commodity traded on exchanges. As a result, its price is not fixed “rigidly” and is constantly changing. Based on the exchange quotations of gold, the prices of finished products, i.e. bars and coins, also change.
See also: Gold bars and the most reputable manufacturers
SPOT gold price
One of the most popular gold rates is the SPOT price, determined analogously to stock prices in financial markets. It is therefore determined by how much gold is available for sale (i.e. supply) and how much gold customers want to buy (i.e. demand). The SPOT price is quoted in U.S. dollars.
Learn more about the LBMA.
Dorota Sierakowska
“Złoto jest coraz łatwiej dostępne, a to ma ogromne znaczenie dla większości inwestorów. Kiedyś złoto kojarzono z pewną niedostępnością, ale przede wszystkim z bogactwem, władzą, luksusem. Ale na szczęście to zaczęło się zmieniać i w tym momencie nie trzeba mieć milionów czy setek tysięcy złotych, żeby mądrze zainwestować w ten kruszec. Możemy mieć nawet kilka tysięcy złotych, kilkaset złotych, a obecnie nawet kilkadziesiąt złotych, żeby zacząć swoją przygodę z inwestowaniem w złoto. To jest szalenie istotne, bo przecież większość z nas chce mądrze ulokować pieniądze, ale wiele osób dysponuje relatywnie niewielkimi oszczędnościami”
The cost of the physical product
The second most popular gold rate is the London fixing published twice a day by the LBMA, the London Bullion Market Association. In Poland, the price of 1 g of gold expressed in PLN is published once a day by the National Bank of Poland. Based on the NBP exchange rate, we determine the price of gold at Goldsaver.
It is important to remember that the exchange rate is not the price at which a retail investor can buy gold. It is the reference price used by commodity exchanges. Retail prices of finished products, i.e. bars and coins, include – in addition to the SPOT price – the so-called “premium”. premium, which includes costs associated with:
- bullion mining
- production of bars and coins
- insurance, transportation and storage of goods
- profit of the manufacturer, wholesaler and retailer
All these additional costs vary slightly depending on the size of the bar. This makes the the price of gold per g between bars of different weights is not the same. Production costs, logistics or vendor margins are felt most strongly for the smallest bars and least for the largest ones. Therefore, the higher the weight of the bar, the less you have to pay for each 1 g of gold. Theoretically, therefore, if one is guided only by the price per 1 g of gold, it is most profitable to buy the largest weight bars.
In practice, however, the most popular and frequently purchased bar size is the 1 troy ounce, which is 31.1 grams. This is also the basic unit of weight used in gold trading, and it is the price per 1 ounce that is quoted by bullion exchanges. An ounce is considered an ideal compromise between the price of gold per g and the bar’s performance characteristics – its liquidity and functionality. Smaller bars are also available on the market: 1 g, 2 g, 5 g and 10 g, as well as larger bars: 50 g, 100 g, 250 g, 500 g and 1,000 g.
Find out why a 1 ounce (31.1 g) bar.
