Market Basics
Spot vs futures
Spot is the price for immediate delivery of a metal, while futures is the price for delivery on a set future date. The two differ by carrying costs, and the gap between them shapes contango, backwardation, and roll decisions.
Spot price is the current price for buying or selling metal for near-immediate settlement, whereas a futures price is agreed today for delivery at a specified later date. Gold and silver trade in both forms, with spot reflecting the here-and-now and futures embedding expectations and carrying costs.
For a trader, the distinction is practical. MCX and COMEX trade futures with defined expiries, while physical and spot markets reflect immediate demand. The difference between spot and futures is where carry, financing, and curve shape (contango or backwardation) live.
Understanding spot versus futures is foundational for reading basis, roll, and parity. A futures price is not simply tomorrow's spot price; it reflects time, financing, and supply-demand conditions that must be accounted for when comparing the two.
Put it to work
Educational reference only. Definitions describe how traders use these concepts and are not investment advice or a recommendation to trade.