Kitco's Displayed Price
To double check that the challenge was working, I checked the comparisons over several days and I noticed a price differential between ours and the Kitco live gold prices that only became apparent to me when the markets were closed over the weekend. If you aren't familiar with the various prices available then you may not think much of it, but it is an important difference if you wish to use it for making trading decisions.
- Kitco shows the Bid price
- GoldVu shows the Spread price
There are 3 basic prices available for any one asset; Bid, Ask, Spread.
Bid is the price that the buyer is offering to the seller. Ask is the price that the seller wants the buyer to pay. Spread is a point in between the Bid and Ask (it shouldn't be an exact middle point but more to do with weighting of the Bids and Asks, which means the Spread could sit either side of the middle price).
In my opinion, if you were only to use a single price then it should be the Spread, not the Bid or Ask. If you wanted to buy or sell gold, then you should take into consideration what the other party's price position is.
Time for examples:
- You want to buy an ounce of gold and Bid $1 for it but all sellers are asking $1500, your order is never going to be filled.
- You want to sell an ounce of silver for $500 but all buyers will only offer $20, your order is never going to be filled.
So how do you go about placing sensible prices for your order? Referencing the Spread price between the Bid and Ask prices is good place as it's a balance between the 2 parties.
In reality, the difference between the Bid and Ask price is normally quite small (as a percentage of the price), but at least it provides you with a more realistic starting point for trading, which is why I was quite surprised to see that the Kitco live gold prices used Bid prices only.
Each to their own I suppose. Ultimately the choice of which price to be guided by is yours, so I leave it to you to consider.