What is the difference between the spot price and the price with a premium ?

Investment in gold attracts many individuals, whether to diversify their portfolio or secure their wealth. However, there is often confusion between the "spot" gold price and the final price paid for gold bars or coins. In this article, we explain this essential difference.

What is the gold spot price ?

The spot price represents the current value of gold on international markets. It is determined by supply and demand and fluctuates in real time, particularly on markets like COMEX (New York) or LBMA (London).
Characteristics of the spot price:
Common base: This is the reference price for pure gold (99.99%) at a given weight, usually the troy ounce (31.1035 grams).
Main use: The spot price serves as the basis for transactions in financial markets and exchanges between institutions.

What is the premium on gold ?

The premium refers to the markup added to the spot price when buying physical gold in the form of bars, coins, or jewelry. It reflects several factors:
Manufacturing costs: Coins and bars require design, production, and sometimes certification work.
Scarcity and demand: Certain coins, such as Marianne, Krugerrand, or Maple Leaf, are highly sought after, increasing their premium.
Condition and preservation: An antique or excellently preserved coin may warrant a higher premium.
Brands and distributors: Sellers apply their commercial margins.

Why is the premium important ?

The premium is an essential factor to consider for any investor in physical gold. It directly impacts the profitability of the investment.
Concrete example:Spot gold price: €1,800 per ounce
Premium for a Marianne coin (10 grams): 5%
Final price paid: €630 (instead of €600 without the premium)
When reselling, the premium may also influence the price a buyer is willing to pay for the gold.

Understanding the difference between the spot price and the price with a premium is crucial to maximizing your investments in physical gold. These concepts allow you to accurately assess your costs and anticipate the profitability of your purchases. Are you passionate about investing in gold ? Discover how Capitalizer can help you manage your physical gold assets, whether coins, bars, or other formats.

These informations are provided for informational purposes only. We strive to provide accurate and up-to-date data, but we do not guarantee the accuracy of the information.
They do not constitute investment advice or recommendations in any way. Users should consult a professional advisor before making any financial or investment decisions.
Investing in assets involves significant risks, including partial or total loss of capital.