What the premium measures
Gold's spot price is a market reference, not necessarily the amount you pay for a particular coin or bar. A dealer may quote a price above spot for a fabricated product. The difference can reflect the product and the transaction, including costs and the dealer's margin. It is not, by itself, proof that a product is fairly priced.
To compare offers, first match the product, weight, quantity, payment method and delivery or custody arrangements. Then ask each seller for the total amount you would actually pay. A low advertised premium can be less useful than a complete quote if shipping, payment or other charges appear later. For IRA purchases, include custodian and depository expenses separately so you can see which part belongs to the transaction and which recurs.
Hypothetical example, not a provider quotation:
| Illustrative assumption or result | Amount |
|---|---|
| Reference value | $2,000 |
| Purchase price | $2,200 |
| Premium | $200 |
| Premium divided by reference value | 10% |
The gold premium calculator applies the comparison to an actual offer.
The quoted premium is only one part of a personal purchase. The guide to buying gold with personal funds covers payment, delivery, storage and resale conditions that can change the complete cost.
A provider’s contract can use “spread” for a different calculation from a matching buyback quote. The 
NGG vs 
American Hartford Gold comparison applies that distinction to the two dealers’ terms.
Use equivalent product and payment assumptions when comparing a dealer discussion with an online retailer. The National Gold Group vs 
JM Bullion page shows which purchase and account questions belong beside that price comparison.
What the spread measures
The spread compares the dealer's selling price with its buying price. The CFTC describes it as the difference between what a dealer charges to sell a specific coin or ingot and what it would pay to buy it back. Its precious-metals advisory explains why you should ask both questions at purchase time.
Hypothetical example, not a provider quotation:
| Illustrative assumption or result | Amount |
|---|---|
| Purchase price | $2,200 |
| Same-time buyback offer | $2,000 |
| Quotation gap | $200 |
| Gap divided by purchase price | 9.1% |
| Gap divided by buyback bid | 10% |
These hypothetical figures use different denominators. Ask the dealer which basis it uses.
The premium compares the ask with reference value; the round-trip gap compares the ask with a bid. A dealer could sell above spot and offer to buy back below spot. The distance from spot to the sale price is only one part of the round trip. Ask whether the buyback quotation is an executable offer, what quantity it covers, when it expires and whether deductions apply for shipping, inspection or payment.
Hypothetical Same-Time Quotation Gap
Why your metal must rise before a sale breaks even
If you pay more than a dealer will immediately offer to repurchase the same item, you begin with a gap. The metal's value or the dealer's later buy price would need to increase enough to cover that difference and any other costs before the sale proceeds equal your total outlay. The CFTC's physical metals risk brochure makes the same basic point about premiums and selling costs.
Break-even is not a forecast. It does not mean the price will rise, tell you when it might rise or guarantee that a dealer will repurchase your metal. A later offer depends on the product, dealer, market and terms at the time. For a retirement account, add annual administration and storage costs across the period you expect to hold the metal. If you do not know those charges, ask for a schedule instead of treating them as zero.
Hypothetical example, not a provider quotation:
| Illustrative assumption or result | Amount |
|---|---|
| Purchase price | $10,000 |
| Same-time buyback offer | $9,000 |
| Quotation gap | $1,000 |
| Gap divided by purchase price | 10% |
| Increase from bid needed to reach purchase price | 11.1% |
This example excludes other charges and does not predict a future sale. Use the gold spread checker for your actual quotes.
Compare like with like
Ask for a written quote that identifies the exact item, its weight and quantity, and the final purchase amount. A comparison between different coins or between a bar and a coin may be useful for choosing what to buy, but it does not isolate the dealer's price for the same product. If one quote includes shipping and another does not, include the missing cost before judging them.
Match the buyback item, quantity and quote time too. A quote for a different product, a different quantity or a different date is not a clean measure of the current gap. Ask whether the seller will actually buy the item it recommends, whether another buyer is permitted and what condition or documentation affects the offer. A buyback policy is not a guaranteed future price.
For a gold IRA, ask the custodian how a sale is authorized and whether the depository must ship the metal to a buyer. Include any inspection, shipping and transaction fees in your calculation. The selling gold IRA guide covers those practical steps.
Questions to ask a dealer
A good quotation should let you understand the purchase without accepting an immediate decision. Ask for:
- The exact product, quantity, total purchase price and quote expiration.
- The reference price and time used to describe any premium.
- A same-time buyback quote for the identical products and quantity.
- Shipping, payment, inspection and other transaction charges.
- Whether the buyback offer is binding and what conditions change it.
- For an IRA, the separate custodian and storage fees and who charges them.
If a seller stresses a free item or waived account fee, calculate the whole transaction first. An incentive may reduce one charge while the purchase price or later costs still matter. A large premium is not automatically fraudulent, but it should be explained clearly enough for you to compare it with a realistic alternative.
How to use the numbers
Collect offers close together in time because a moving reference price can make quotations from different moments hard to compare. Retain the written quotes, note their expiry and ask the sellers to clarify any missing fee. Avoid treating the dealer's own future-value projection as a substitute for a current buyback quotation.
Choose the product and custody arrangement that meet your needs, then compare the total costs and flexibility of the offers. If the expected holding period is long, recurring account charges deserve as much attention as the initial price. If you may sell sooner, the bid and the terms for selling can become especially important. Neither approach removes market risk.
Frequently asked questions
Is the premium the same as the spread?
No. The premium compares the purchase price with a reference value, while the spread compares the dealer's sale price with its buyback price for the same item. Ask for both figures at the same time and include any transaction charges separately.
Does a low premium guarantee a good deal?
No. A low stated premium may leave out payment, shipping or custody charges, and it does not establish the buyback price. Compare complete written offers for the same product and ask whether each buyback quotation is executable and subject to conditions.
Can a gold dealer change its buyback price?
A quotation can be limited by time and conditions, and a future offer can differ from a current one. Ask how long the quote is valid, what quantity it covers, whether inspection affects it and what fees apply. A stated willingness to buy is not a guarantee of a particular future price.
Do IRA storage fees form part of the dealer spread?
Storage fees are separate charges for the custody arrangement, not the difference between the dealer's buying and selling prices. They still affect your overall result. Obtain the fee schedule from the responsible custodian or depository and include those charges when comparing the holding period.