When a gold quote and a futures price can be compared
Gold spot, futures and retail prices can be compared when their currency, unit, timestamp and product terms are clearly identified. Their difference may reflect the futures basis, a retail premium or timing—not a change in gold’s price over time.
| Quote | Currency and unit | Time | Contract month | Retail premium | What the difference can mean |
|---|---|---|---|---|---|
| LBMA Gold Price | US dollars per troy ounce. Other currencies are conversions of that auction, not a second auction. | 10:30 and 15:00 London time on London business days. | None. This is an auction for unallocated loco London gold, not a futures month. | No. It is a wholesale benchmark, not a coin or small-bar offer. | Against a futures price, the gap can be the futures basis and the time between the two prints. CME’s case study compares futures with spot directly. |
| Gold futures | Name the currency and unit from that contract’s specification. In CME’s hedging case study, the standard contract is quoted in US dollars per troy ounce, and the arithmetic uses 100 ounces. | The timestamp of the futures print. It is not the twice-daily London auction. | Read the contract code, such as the GCM3 and GCH3 examples in the CME study. The month is part of the comparison, not a reason to discard it. | No coin premium. Basis is futures minus the spot price. | The gap versus spot can be basis. The study’s 2023 prices illustrate the method; they are not today’s quote. |
| A dealer or app price for a bar or coin | The seller’s currency, per ounce, gram or coin. | Whenever that seller updates the screen. | None, unless the screen names a futures contract. | Often yes. Fabrication, a dealer spread or a tax can sit inside the number. | Versus a wholesale benchmark, the gap can be a retail premium, a unit difference or a different timestamp. |
What each row is
The LBMA Gold Price is administered by ICE Benchmark Administration. The auctions are at 10:30 and 15:00 London time, in US dollars, for unallocated loco London gold. Converted prices in other currencies are not a separate tradeable auction.
A futures price can be set next to a spot price. CME Group’s hedging case study does that: it defines basis as the futures price minus the spot price, and its formula multiplies the spot price by 100 ounces for the standard contract. Those example prices are from 2023.
Confirm the contract code and its specification before using the price. Different gold futures products can have different contract sizes. The 100-ounce figure belongs to the standard contract in that CME study, not automatically to every gold futures symbol.
How to read the difference
Once currency, unit, timestamp and product terms are identified, the subtraction is a comparison. It still has to be explained. A futures-versus-spot gap can be basis. A shop price above the LBMA auction can include a retail premium. Two prints at different times can differ because time passed. None of those, by itself, is gold’s price change over that interval.
- Convert the currency and unit first when they differ. An ounce price and a gram price can be compared after that conversion.
- Keep the futures month in the comparison. CME compares futures with spot; it does not treat them as the same product.
- State both timestamps. A time gap is part of the explanation.
- Say whether a retail premium is still inside the dealer price.
- Do not apply the 100-ounce size until the contract code matches the product whose specification says so.
A worked comparison: basis and retail markup are different gaps
Hypothetical teaching example—not current quotes, an LBMA auction result or a trading opportunity. Assume all three prices below are in US dollars per fine troy ounce and carry the same stated observation time. The spot reference is an invented wholesale quote, not a live feed. The futures quote is for a specified December contract in this example.
| Price label | Invented price per fine troy ounce | What to check |
|---|---|---|
| Wholesale spot reference | $2,000 | Currency, unit, timestamp and quote convention |
| December futures contract | $2,020 | Exact product code, delivery month and whether this is a last trade, bid, ask or settlement |
| Dealer’s offer for a one-fine-troy-ounce gold product | $2,080 before shipping and taxes | Fine-gold content, dealer terms and included charges |
Using the futures-minus-spot convention in the cited CME case study, the futures basis is $2,020 − $2,000 = $20 per troy ounce, or 1% of the spot reference. This is not an annualized yield. It does not establish a profitable arbitrage after financing, execution and delivery costs.
The dealer’s quoted markup over the same spot reference is $2,080 − $2,000 = $80, or 4%. That quoted gap is not necessarily the dealer’s profit. It can reflect fabrication, distribution and other terms. Shipping or taxes excluded from the quote would increase the buyer’s total cost.
The dealer offer is also $60 above the futures quote, but that subtraction is not the futures basis or a measure of gold’s return over time: these are different products and terms.
Use this five-step check on your own screen
- Identify the product: wholesale spot, a named futures contract, or a specific physical product. An ETF share price or a broker’s CFD is a different instrument.
- Match currency and fine-gold units. A troy ounce is not an everyday avoirdupois ounce; use the product’s stated fine-gold content.
- Record both timestamps and time zones, including delayed-quote labels. A daily benchmark and a later live quote are not simultaneous.
- Record the futures month and quote type. Do not silently compare a settlement price with a later bid or ask.
- Separate the product-price difference from shipping, taxes and other retail charges before interpreting the gap.
Why the labels matter: the LBMA Gold Price is a scheduled benchmark, while a named futures contract has its own delivery terms. Read the original explanations from LBMA and CME Group. The invented numbers above are ours, not quotes supplied by those organizations.