The international gold price is quoted in US dollars per troy ounce, which is 31.1035 grams. It is the price at which large deals are done between banks, refineries and funds. Nobody buys a 50-gram bar at that price, and nobody sells one at that price either. You can see the live quote, already converted to euros per gram, on our gold and silver price today page.
What the premium is
The premium is what you pay for a specific piece above the value of the metal it contains. It covers three things: making the piece (refining, minting, certifying), getting it to the seller, and the seller's margin. It is expressed as a percentage over the market price and varies a lot depending on what you buy.
- Size rules. Making a one-kilo bar costs almost the same as making a 10-gram one, but the cost is spread over far more gold. That is why small pieces carry a higher premium, in percentage terms, than large ones.
- Coin or bar. Well-known bullion coins (Krugerrand, Maple Leaf, Philharmonic) usually carry a slightly higher premium than a bar of the same weight, in exchange for being easier to sell one at a time. We compare them in bars or coins.
- Timing. When demand for physical metal is strong, premiums rise even if the quoted price does not move. It is the part of the price that swings most in the short term.
Silver carries a higher premium, plus VAT
With silver the cost of fabrication weighs much more, because the metal is worth less per gram. A one-ounce silver coin can carry a premium, in percentage terms, several times higher than the same coin in gold. On top of that comes VAT at 21%, which silver pays and investment gold does not. That VAT is not recovered when you sell. We explain it in investment gold and VAT.
"Comparing two offers by the spot price is like comparing two flats by the price of the land. What matters is the price per gram of fine gold with everything included."
The other premium: the buy-back
When you sell, a professional buyer will pay you below the quoted price. That difference is their margin and the cost of putting the piece back on the market. Between what you paid extra when buying and what you will receive less when selling lies the distance the gold price has to travel for the deal to work out for you. That is why it pays to buy with a tight premium and a buy-back agreed in advance, and why physical gold makes sense over years, not weeks.
How to compare two offers
- Convert everything to euros per gram of fine gold. Total price of the piece, VAT included if it applies, divided by the grams of pure metal it contains. In a 900-fine coin, the fine gold is 90% of the weight.
- Compare against the quote at the same moment. The price changes every minute. An offer from this morning and one from this afternoon are not comparable without checking the market at each moment.
- Ask what is included. Transport, insurance, custody and certificate may be included or extra. Ask for a fixed price in writing before you pay.
- Ask about the buy-back. How much they would pay you for it today. That figure tells you how much premium you are really paying.
If you want to see how the price of a gram is worked out step by step, it is in how to calculate the price of a gram of gold.
Frequently asked questions
What is the gold premium?
What you pay for a piece above the value of the metal it contains: fabrication, distribution and the seller's margin. It is expressed as a percentage over the quoted price.
Why is a small coin more expensive per gram than a large bar?
Because the cost of making it is spread over less gold. In percentage terms, the premium falls as the piece gets bigger.
Does silver pay VAT?
Yes, 21%, and it is not recovered when you sell. Investment gold is exempt.
How do I know whether an offer is good?
Work out the price per gram of fine gold with everything included and compare it with the quote at the same moment. And ask how much they would buy it back for today.