The 4 Costs of Buying Gold
1. The Premium (Most Important)
The premium is what you pay above the spot price. This is where dealers make money—and where you can get ripped off.
Gold Dealer Fees Exposed
The hidden costs dealers don't want you to understand—and how to avoid them.
Updated: December 2025•11 min read
The Uncomfortable Truth: Some gold dealers charge 30-50% markups on "exclusive" coins while keeping their pricing opaque. This guide shows you what's fair—and what's a ripoff.
What's a Fair Premium?
| Product | Fair Premium | Ripoff Premium |
|---|---|---|
| 1 oz Gold Bars | 2-5% | 10%+ |
| American Gold Eagles | 5-8% | 15%+ |
| Canadian Maple Leafs | 4-6% | 12%+ |
| Krugerrands | 3-5% | 10%+ |
| "Exclusive" Numismatic Coins | Avoid entirely | 30-100%+ |
2. The Spread (Buy/Sell Difference)
The spread is the difference between what a dealer charges to sell you gold and what they'll pay to buy it back.
- Fair spread: 3-5% total (you lose 3-5% if you buy and immediately sell)
- Problem spread: 10-20%+ (some dealers pay far below spot on buybacks)
Always ask: "What will you pay me if I sell this back tomorrow?" A reputable dealer will give you a clear answer.
3. Shipping & Insurance
- Free shipping threshold: Most reputable dealers offer free insured shipping over $199
- Below threshold: $10-30 typical
- Red flag: Charging for shipping on large orders
4. Gold IRA Fees (If Applicable)
- Setup fee: $50-250 (one-time)
- Annual custodian fee: $50-100
- Annual storage fee: $100-200
- Total annual: $150-300 is fair
The #1 Scam: Numismatic Coins
How it works: Sales reps push "rare," "limited edition," or "collector" coins with premiums of 30-100%+ over melt value. They claim these will appreciate, but they almost never do.
The reality: When you try to sell, you'll get melt value—not the inflated price you paid. You're underwater from day one.
Protection: Stick to standard bullion coins (Eagles, Maple Leafs, Krugerrands) with premiums of 4-8%. If a rep pushes "exclusive" products, walk away.
How to Calculate Total Cost
Before any purchase, calculate:
- Check current spot price (kitco.com, google "gold spot price")
- Get the dealer's total price including shipping
- Calculate: (Dealer Price - Spot Price) / Spot Price × 100 = Premium %
Example: Spot = $4,350. Dealer price = $4,610 delivered.
($4,610 - $4,350) / $4,350 × 100 = 6% premium ✓ Fair for a Gold Eagle
Red Flags to Watch For
- ❌ Won't disclose total price until you commit
- ❌ Pressure to buy "exclusive" or "rare" coins
- ❌ Won't answer buyback questions
- ❌ Claims of guaranteed returns
- ❌ "This price is only good for 10 minutes"
- ❌ No BBB rating or many unresolved complaints
Frequently Asked Questions
Why do dealers charge premiums?
Premiums cover minting costs, dealer margins, shipping, and insurance. A reasonable margin is necessary for dealers to operate—the question is whether it's fair (4-8%) or excessive (20%+).
Do all dealers charge the same?
No. Online dealers (JM Bullion, SD Bullion) typically have lower premiums than local shops or TV advertisers. Always compare at least 2-3 sources.
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