Buy price and sell price: the spread on gold and silver explained

What the spread actually is

Both prices start from the same point: the world spot price for gold or silver, which moves through the trading day. Our selling price is spot plus a premium. The buy-back price is set below that, and how far below depends on the product. The distance between the two is the spread.

A money changer works the same way. The board shows a buy rate and a sell rate for the same currency, and nobody expects them to match. With bullion the thing changing hands is a physical object, so it also has to be checked, held and sold on again.

None of this is a hidden fee. It is the difference between two prices that are both quoted openly. At Bullion King the premium on every product is shown on its product page, and live prices are on our market page, so you can see both sides before you decide anything.

What the spread pays for

When a dealer buys a bar back, the job is only half done. The piece has to be tested, recorded, held and then sold to someone else, and while it sits in the safe the dealer carries the risk that the price falls. The spread covers that work and that risk.

Some of the costs are obvious. Others you would only notice if you worked behind the counter:

• Testing every piece that comes in. We use a Precious Metal Verifier and XRF, plus a Veriscan check on PAMP bars, before anything goes back on sale.
• Price risk while the metal is held, since spot can drop between the day we buy and the day we sell again.
• Handling and resale: cleaning, repackaging where needed, and getting the stock back into the market.
• Refining for items that cannot be resold as they are, such as unbranded bars or scrap.
• Compliance under the PSPM Act. Dealers keep records, and for transactions above S$20,000 we take NRIC or passport details and carry out customer due diligence.
• The everyday cost of running a shop counter, from rent to staff wages.

Why known refiners and bullion coins usually fetch a better buy-back

A dealer prices a buy-back around one question: how quickly and confidently can this be sold again? A PAMP, Valcambi or Perth Mint bar, or a Maple Leaf or Britannia coin, is recognised by buyers almost anywhere. The maker, weight and fineness are struck on it, and refiners accredited by bodies such as the LBMA have a record the market trusts.

That recognition cuts the dealer's cost and risk. Testing is quicker, there is a ready buyer, and the piece can usually go straight back on the shelf without being melted. Less work and less risk generally means a narrower gap between buy and sell.

An unbranded bar, a souvenir piece from a little-known mint or a bar with no markings is another story. Even if it tests as pure, many buyers will not take it as it is, so it may have to be melted and refined. That cost comes out of what you are offered.

Condition matters as well. A bar that is badly scratched, bent or engraved, or a coin with heavy marks, is harder to resell at full value. Our guide on sealed assay cards looks at whether keeping a bar in its original packaging is worth it for you.

Jewellery, small pieces and silver: where the gap is wider

Gold jewellery sits at the far end of the scale. Most of it is below bullion purity, 916 for a typical 22 karat piece, and it contains solder and other metals that have to be refined out before the gold can be used again. So the buy-back is based on the pure gold content less refining costs. The workmanship you paid the goldsmith for does not come back. Our separate guide on jewellery and bullion explains the difference in more detail.

Size has a quieter effect. Very small bars cost more per gram to make, and a buyer will not pay that making cost back to you. Larger bars from known refiners tend to sit closer to spot on both sides.

Silver follows the same logic with one twist. Because it is so much cheaper per gram, the fixed costs of handling, storing and moving it take up a bigger share of each piece's price. As a proportion, the spread on silver usually looks wider than on gold.

How to compare spreads fairly between dealers

Looking only at the selling price tells you half the story. A dealer with a lower premium may also pay less on buy-back, and the reverse happens too. The fairer test is to check both numbers for the same product at roughly the same time.

Pick one exact item, say a 1 oz PAMP bar or a 1 oz Maple Leaf, and note what each dealer sells it for and what they would pay to buy it back. Do this within a short window. Spot moves through the day, so a quote from this morning will not line up with one from this evening.

Then add up what it costs to get the metal into your hands. Card payments often carry a fee, and delivery may be charged while self-collection is not. At our shop, self-collection is free, and paying by PayNow or bank transfer avoids the card fee.

Last, ask what a posted buy-back figure depends on. It is an indication. At Bullion King the final amount is set at the counter after testing, at that moment's price, so it pays to understand what conditions apply before you compare numbers.

Timing, weekends and what a quote really means

Because both prices follow live spot, the spread is a gap that moves with the market, not a fixed dollar amount. On an active trading day you will see the buy and sell figures shift together.

At weekends the world market is closed, so we sell at the last closing price. Prices stay put until trading reopens.

If you plan to sell, bring the piece along with any assay card, receipt or certificate you have. Paperwork does not change what the metal is, but it makes the history clear. Our guide on selling gold in Singapore walks through the steps at the counter.