Have you ever looked at the 1 oz of gold price and thought, “How did they even come up with that?” The price may seem random, but there is a lot going on. It’s up a couple dollars right now. In the blink of an eye, it’s gone by lunch. Gold is like a cat: it doesn’t care what you want it to do and is always ready to do the opposite.
Big international markets establish the price for an ounce of gold, which is also known as the spot price. London, New York, and Hong Kong are all hectic places where traders push numbers faster than a grandma at bingo night. It’s priced in US dollars, but you can get conversions from anywhere, albeit they may be different depending on the site or the day’s currency rate.
What really makes that number change? A lot. News on the economy, fights in politics, anxieties about inflation, and the pricing of airline meals (well, maybe not the last one—unless there is gold in the dessert). When investors are worried about their money in the bank, they buy gold. They store it in central banks. When there is political uncertainty, gold can shine brighter than before.
There’s more than simply the market ticker, though. If you want a piece of gold in your hand, like a glittering coin or a sleek bar, you have to pay more than the spot price. Dealers charge more. This includes things like minting, shipping, storing, and their own share of the pie. Some days that premium is minor, but other days it is bigger if there aren’t enough supplies or if demand is high.
Not all gold things that weigh one ounce are the same, either. Coins from well-known mints normally cost more than plain bars. People will pay more for flashy packaging, well-known brands, or even just the year stamped into the metal. Some collectors will spend a lot more for an ounce of gold than the rest of us would.
After that, you have to pay taxes. Depending on what and where you buy, you could have to pay more for VAT or sales tax in some countries. Don’t forget about delivery and insurance if you buy something online. A vendor doesn’t just put gold in a plain envelope.
Depending on how you feel, seeing the price go up and down can be exciting or unpleasant. Some people establish price alerts and jump in when the price drops. Some people just buy it, put it away, and forget about it until a birthday or a terrible headline. It’s hard to time the market, just like it’s hard to guess what the weather will be like next week.
Here’s a tip: don’t let the drama get to you. Look around. Get prices from a couple different dealers. Check the fine print for information regarding shipping, premiums, and returns. One ounce of gold is still one ounce, no matter when you acquired it or how you got it. The markets will move. The most important thing is to know what those big numbers really mean. You might even want to make an inside joke with your future self when the price goes up again.