Why are the prices quoted for precious metals by dealers different than the prices listed in the newspaper?
Most newspapers either show the previous day’s prices from the New York commodity exchanges or London market. The New York prices are for the standardized futures contract, closest to maturity (i.e., the nearby delivery month) on the close of exchange business. The London prices are for the “fixing” prices set by the world’s largest market makers to balance their books. Both New York and London prices provide a good benchmark for the value of gold (or silver, or platinum or palladium). However, the prices reflect very specific set product specifications, terms and trading counterparties; they do not represent the price of metals in any quantity, form, location or trading forum. Consequently, dealers monitor the New York and London prices to determine a starting price point from which they can determine a competitive final price for a particular transaction. The dealer quotes the current spot price at that particular moment in time or a quote for a specific product where the cost of tha
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