Guide to gold

Gold trading spreads: the hidden cost of gold investing

What is the price spread and why does it matter?

The price spread is the difference between the price offered to you when you want to buy precious metals and the price bid for your bullion when you want to sell.

Just like in all other markets, you'll find that bid prices for precious metals are always lower than offers. Because buyers want a bargain, while sellers want to get top price.

On BullionVault's Order Board we always show you these two prices so you can see the difference between them – the spread.

That's because the spread represents a cost to you, the investor. And you must take this cost into account to know if you're getting a good deal.

Yet on almost all websites selling gold, silver, platinum and palladium, you are unlikely to see these prices side by side.

Why is that?

Well, we probably wouldn't want to show you sell and buy prices side-by-side either if BullionVault's spreads were 5% or more!

In our busiest market for gold, Zurich, spreads are regularly between 0.10% and 0.20%. That translates to just a few Dollars, Pounds or Euros on 100 grams of gold.

Also note that it's a "market spread" and not a "dealer's spread".

Because on BullionVault – unlike any other physical platform we know of – you can set your own price as you wish, at no extra charge.

So, can all the other thousands of buyers and sellers using our Order Board. And between them, they create a genuine market, with a genuine market spread, rather than pricing gold simply so a dealer can make a profit.

How do spread percentages work out in real pounds and pence?

If you take 100 grams of gold this is what the difference in spread could look like:​​



As you can see from the example above, which for BullionVault includes the 0.5% commission charged when you buy and when you sell, you will pay the most and receive the least back if you buy a 100g gold bar compared with 100g purchased and vaulted using BullionVault.

Please don't take our word for it. Check the prices on any website selling bullion and compare their spreads.

Then compare our live order board prices 24/7. Remember that a round trip, buying and then selling, will also carry a dealing commission of 0.5% each side.

Gold price spreads are tight on the BullionVault live order board

What about storage and insurance?

If you are tempted by buying coins or a small bar to keep at home, you should first check your home insurance policy.

That's because you may not be covered if you do not specify the individual high-risk items you own, such as gold coins and bars.

And when you do declare your bullion-at-home to your insurer, you may very likely see your premium increase and even incur an admin fee to add your precious metals to their records.

With BullionVault your gold, silver, platinum and palladium are stored and insured in professional vaults. We charge $4 minimum per month for gold (currently around £3.30) and $8 minimum per month for silver, platinum and palladium (around £6.35 at current exchange rates).

You can see our tariff here and use our cost calculator to estimate your full expenses.

Hand in hand with the peace of mind of storing your bullion at low cost in professional vaults, using BullionVault means you can also sell your precious metals instantly at any time 24/7.

Please Note: This analysis is published to inform your thinking, not lead it. Previous price trends are no guarantee of future performance. Before investing in any asset, you should seek financial advice if unsure about its suitability to your personal circumstances.

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Galmarley Ltd T/A BullionVault
3 Shortlands (7th Floor)
London   W6 8DA
United Kingdom