What the premium you were quoted means
The panel reports the premium over the value of the gold in the product, the dollar markup on one unit and on the whole order, and a plain reading that tells you to get the price and every fee in writing. It does not grade the quote, because a premium depends on the product, the size of the order and the work the dealer does on the account, and the four kinds of product below carry different premiums for reasons that have nothing to do with the dealer.
- Bars The simplest product to make
- A bar is cast or stamped to a stated weight and fineness with no design to strike, so the smallest share of its price goes to fabrication. More of the premium on a bar is the dealer's own margin and service, which makes a bar quote the cleanest read on what a dealer charges for its work.
- One-ounce sovereign coins The mint charges before the dealer does
- The American Gold Eagle and Buffalo, the Maple Leaf, the Philharmonic and the Kangaroo are legal tender struck by a national mint to a tight specification. The mint sells them to its distributors above the value of the gold, and the dealer adds its own margin for the account work, storage arrangements and rollover paperwork on top of that.
- Fractional coins The minting cost barely falls with the size
- A half, quarter or tenth-ounce coin goes through the same striking, inspection and packaging as a one-ounce coin and holds a fraction of the gold, so the fixed cost is spread over less metal and the premium per ounce climbs. Inside an IRA the argument that small coins are easier to sell is weak, because the custodian sells whatever quantity you instruct.
- Proof coins A collector finish on the same gold
- A proof Gold Eagle is IRA-eligible and holds the same gold as the bullion version, and the extra price pays for the mirror finish, the packaging and the collector market. A custodian selling the position back is pricing the metal rather than the finish, so that part of the price does not come back to the account.
What is a coin premium, and why does every dealer charge one?
The premium is the gap between what a dealer charges for a coin and what the gold inside it is worth at the market price. Every dealer charges one, because a coin has to be minted, distributed, insured and held in inventory before it reaches you, and none of that is free. Spot is the price of the metal rather than the price of a product made from it.
What varies is the size of that gap, and the product drives much of it. Minting a tenth-ounce coin costs nearly what minting a full-ounce coin costs, against a tenth of the metal to spread it over, so the share of the price that pays for fabrication climbs as the coin gets smaller. The CFTC's advisory on physical metals says some fraudulent dealers have charged spreads of more than 300 percent while other dealers may charge less than 20 percent. A spread there is the gap between a dealer's buy and sell price rather than the premium over spot, and the same advisory tells buyers to get every fee, commission and the agreed price in writing before signing.
That is why the product you are quoted matters as much as the dealer you pick. A reader who agrees to fractional coins because they were told the coins are easier to sell later has usually accepted a higher markup per ounce than the bar they could have bought instead, and inside an IRA the divisibility argument is weak anyway, since the custodian sells whatever you instruct.
How to check a dealer quote against the spot price
Four steps, and the first one is where most of the accuracy comes from.
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Pick the exact product you were quoted
A one-ounce American Gold Eagle and a one-tenth-ounce Eagle carry the same name and completely different markups, because the fabrication cost is nearly the same on both and the tenth holds a tenth of the metal. Getting the size right is most of the accuracy here.
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Enter the total quote, not the per-coin price
Sales floors quote both ways and switch between them mid-call. Put in whichever figure you were given and set the quantity to match, and the calculator handles the division.
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Check the spot price it is comparing against
Spot is fetched at build and refreshed in your browser, and the timestamp sits beside it. Gold moves a percent or more in a day, so a quote from Tuesday checked against Friday's spot will read a little off through no fault of the dealer.
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Read the percentage beside the dollar markup
The percentage says how far above the gold the quote sits, and the dollar figure says what that costs on your order. On a $50,000 purchase, each percentage point of markup is $500, so a quote that looks close in percentage terms can still be worth a second written quote on the identical product.
What each input means, and where to find it
Three of these come off the order confirmation. The fourth is fetched live and shown above so you can see what the comparison is being run against.
- Quoted price
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What the dealer said the order comes to. Use the number before shipping and insurance if those are itemised separately, because they are a real cost but they are not a markup on the metal.
Where to find it The written confirmation, or the figure read out on the call. A dealer who will not put a total in writing before you commit is telling you something on its own.
- Product
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Which of the fourteen IRA-approved coins and bars we track. Each has its own weight and fineness, and a Gold Eagle is 91.67% pure while a Buffalo, Maple Leaf, Philharmonic and every bar on the list is 99.99%.
Where to find it The order confirmation names the exact product and weight. If it says only gold coins, ask which ones before anything is bought.
- Quantity
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How many of that product the quote covers. Some dealers price a larger order lower per coin, so enter the quantity the quote was actually given for rather than the one you might buy later.
Where to find it The order confirmation.
- Spot price
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The market price of the metal itself, per troy ounce. It is what the calculator measures the quote against, and it is the number a dealer is adding their margin on top of.
Where to find it Fetched live above. Our gold price today tracker carries the same figure with the LBMA fix behind it.
How the premium percentage is calculated
The whole calculation is one division, and the only part that catches people is how much gold a coin actually holds.
The calculator takes the melt value of the product, which is its gold content in troy ounces multiplied by the live spot price, and expresses the quote as a percentage above that. A one-ounce Gold Eagle contains one troy ounce of gold, and the copper and silver alloy that makes it 91.67% pure brings its gross weight to about 1.09 troy ounces. The calculator values the gold, so it never multiplies the stated weight by the fineness. The calculator reads your quote against the gold in the product and records no benchmark premium for any coin or bar. For the advice that goes with the number, the CFTC's advisory on physical metals tells buyers to get every fee, commission and the agreed price in writing before signing.
premium % = ((quote ÷ quantity) − (gold weight × spot)) ÷ (gold weight × spot) × 100
- quote
- Total price the dealer named, before shipping and insurance
- gold weight
- Gold content of the product in troy ounces, 1 for a one-ounce Gold Eagle even though the whole coin weighs about 1.09 troy ounces
- spot
- Live market price of gold per troy ounce
What this percentage leaves out
- Shipping and insurance, which are real costs and are charged separately at most dealers.
- The buy-back spread, because a dealer bidding under spot on the way out costs you a second time and this measures only the purchase.
- Custodian and depository charges, which our fee calculator prices.
- Sales tax, which does not apply inside an IRA but does on a personal purchase of the same coin.
- Any judgment on whether the product itself belongs in a retirement account.
Three quotes, checked against spot
All three were run through the calculator above with gold at $3,400. They are the three shapes a quote usually takes.
Carol is quoted on Gold Eagles
Told $3,720 per one-ounce American Gold Eagle with spot at $3,400, buying ten of them for a $37,200 order.
- Product
- Gold Eagle, 1 oz
- Quote
- $37,200
- Quantity
- 10
9.4% over spot, which is $320 a coin and $3,200 on the order.
The percentage on its own does not say whether the price is a good one, while the dollar figure says what a second quote is worth checking for. The percentage is measured against the $34,000 of gold in the order, so each point is $340, and a second written quote on the identical coin, taken the same day, is the comparison that settles it.
Warren is offered fractional coins
A dealer suggests quarter-ounce Eagles rather than one-ounce, calling them easier to sell in pieces later. Quoted $980 each with spot at $3,400.
- Product
- Gold Eagle, 1/4 oz
- Quote
- $980
- Quantity
- 1
15.3% over spot, which is $130 on a coin holding $850 of gold.
Fractional coins carry a structurally higher premium because minting a quarter-ounce coin costs nearly what minting a full ounce does. Inside an IRA the divisibility argument is weak anyway, since the custodian sells what you instruct and does not need a small coin to do it.
Priya prices bars instead
Same $37,200 budget, quoted on PAMP Suisse one-ounce bars at $3,530 each with spot at $3,400.
- Product
- PAMP Suisse bars, 1 oz each
- Quote
- $37,065
- Quantity
- 10.5
3.8% over spot, which is $130 a bar and $1,365 on the order.
Same metal, same depository, and about $1,800 less in markup than Carol's Eagle quote on a comparable order. A bar carries the least fabrication of anything on the approved list, so ask for a bar quote beside any coin quote before you choose.
What a premium costs in dollars
The first two figures are arithmetic on a $50,000 purchase. The third is a spread the CFTC reports, which measures a different gap from the premium over spot.
- $500 Each percentage point on $50,000
On a $50,000 purchase, each percentage point of markup is $500 that buys no metal, so a quote one point higher on the identical product costs you $500 on the day you buy.
- $2,500 Between a 3% and an 8% premium on $50,000
The difference between a 3% and an 8% premium on $50,000 is $2,500, which never reaches the account and has to be earned back by the metal before the position breaks even.
- 300% Spreads the CFTC reports at fraudulent dealers
The CFTC's advisory on physical metals says some fraudulent dealers have charged spreads of more than 300 percent while other dealers may charge less than 20 percent. It defines the spread as the difference between a dealer's buy and sell price, so these are two reported data points on the round trip, not a range of premiums over spot. The advisory tells buyers to get every fee, commission and the agreed price in writing before signing.
What people get wrong about coin premiums
The first of these is the most common, and it points in the opposite direction to the other three.
Does a premium mean the dealer is overcharging me?
No, every dealer charges one, because a coin has to be minted, distributed, insured and held in inventory before it reaches you, and none of that is free. What the percentage tells you is how much of the price is not metal, and the fair comparison is the identical product quoted by a second dealer on the same day.
Are proof and commemorative coins worth the extra?
No, not inside a retirement account. A proof American Gold Eagle is IRA-eligible and holds the same gold as the bullion version, and the extra price pays for the finish and the collector market. A custodian selling the position back is pricing metal rather than collectibility.
Is the premium the only cost of buying?
No, the round trip costs more than the purchase premium alone. A dealer buying the metal back bids against the spot price on the day rather than against what you paid, so the premium paid going in is not recovered on the way out. Ask for the buy-back terms in writing in the same conversation as the sell price.
Does a lower spot price mean a better deal?
No, the premium is what the dealer controls and spot is what the market does. A quote taken on a day gold fell is not a better quote, and the only comparison that means anything is the same product at two dealers against the same spot price at the same moment.
Coin premium questions
What is a fair premium on a gold coin?
No single figure is fair for every order, because the premium depends on the product, the size of the order and the work the dealer does on the account. The CFTC's advisory on physical metals names no fair premium either. It reports that some fraudulent dealers have charged spreads of more than 300 percent while other dealers may charge less than 20 percent, where a spread is the gap between a dealer's buy and sell price, and its advice is to get every fee and the agreed price in writing before signing. The practical test is a second written quote on the identical product on the same day, and on a $50,000 purchase each percentage point between the two quotes is $500.
Why do dealers push proof coins so hard?
A proof Gold Eagle carries the same gold as the bullion version at a higher price, and the extra pays for the finish and the collector market rather than anything the depository or the custodian sees, and the CFTC's advice to get the agreed price in writing before signing applies to it as much as to bullion. Proof coins are IRA-eligible, so nothing about the sale is improper, and the bullion coin holds the same ounce with less of the price going to anything but metal.
Does the premium come back when I sell?
No, the premium does not come back. A dealer buying metal back bids against the spot price on the day rather than against what you paid, so the premium you paid at purchase is spent. That is why the round-trip cost matters more than the sticker, and the arithmetic is simple, since a 6% purchase premium plus a sale 2% under spot means gold has to rise about 8% before the position breaks even.
Which gold coins can go in an IRA?
26 U.S. Code 408(m)(3) sets a 99.5% minimum fineness for gold bullion and carves out an explicit statutory exception for the American Gold Eagle, which is 91.67% pure and eligible anyway. Bars must come from a refiner meeting LBMA or COMEX standards. We track fourteen products that clear those rules. Rare and graded coins generally fall outside the bullion exception, so ask the custodian to confirm a coin is eligible before the dealer ships it.
Is a premium negotiable?
Yes, on larger orders, though not usually by much. The move that works is having a second written quote on the identical product and saying so, since a dealer holding your paperwork and no competition has no reason to move. Get both quotes on the same day, because a spot move of a percent will otherwise swamp the difference you are trying to see.
What does spot price actually mean?
It is the price for immediate delivery of one troy ounce of gold in the wholesale market, set continuously and benchmarked twice a day by the LBMA auction in London. Nobody buys a physical coin at spot, because spot prices metal rather than a minted, shipped and insured product, and the gap between the two is the premium this calculator measures.