The spot price is the current market price at which an asset, such as a commodity, currency, or stock, can be bought or sold for immediate delivery and settlement, typically within 1-2 business days. In contrast, the futures price is the agreed-upon price for a transaction that will occur at a predetermined future date, as specified in a futures contract.

Key Differences
Delivery Timing:

Spot price involves instant (or near-instant) transactions.

A futures price locks in a price for future delivery, often weeks or months later.

Price Determinants:

The spot price is driven by real-time supply and demand.

The futures price factors in the spot price plus additional costs like storage, interest rates, and expected market shifts (contango or backwardation).

Purpose & Use:

Spot trading is used for immediate ownership (e.g., buying physical gold).

Futures contracts hedge against price volatility or speculate on future movements.

Settlement:

Spot trades settle quickly (T+1 or T+2).

Futures settle on the contract’s expiration date, often in cash or physical delivery.

Example
If gold’s spot price is $2,000/oz, its 3-month futures price might be $2,020/oz due to carrying costs (contango). Traders choose between them based on urgency, costs, and risk appetite.