Gold Dealer Markups Exposed: How Much Are You Really Paying?
The spot price of gold isn't what you'll pay. The difference—the dealer markup—can range from reasonable (3%) to outrageous (400%). Here's how to know what's fair.
🚨 The Markup Reality
At today's gold price of ~$4,350/oz, a 5% markup means you're paying $217 extra per ounce. The CFTC has documented dealers charging 20-400% markups on "collectible" coins—that's $870 to $17,400 per ounce in pure profit.
Fair markup: 3-5% for standard bullion. Anything higher requires serious justification.
Understanding the Markup Structure
When you see gold quoted at "$4,350 per ounce," that's the spot price—the wholesale trading price for 400-ounce bars between major financial institutions. You will never pay spot price as a retail buyer.
The markup exists for legitimate reasons: minting costs, dealer inventory, security, shipping, insurance, and profit margin. The question isn't whether there's a markup—it's whether the markup is reasonable.
Current Markup Ranges (December 2025)
| Product Type | Fair Markup | High (Warning) | Scam Territory |
|---|---|---|---|
| 1 oz Gold Bars | 2-4% | 5-8% | 10%+ |
| American Gold Eagle | 5-7% | 8-12% | 15%+ |
| Canadian Maple Leaf | 3-5% | 6-10% | 12%+ |
| Fractional Coins (1/4 oz) | 8-12% | 15-20% | 25%+ |
| "Exclusive" Numismatic | N/A | 40-100% | 200-400%+ |
The Numismatic Coin Trap
The CFTC (Commodity Futures Trading Commission) has repeatedly warned about dealers pushing numismatic or "collectible" coins with massive markups. Their advisory states:
"Customers are often encouraged to purchase numismatic coins with premiums that can range from 40 percent to 200 percent above the spot price. Buyers are told the coins will only go up in value because of their rare or collectible nature."
— CFTC Customer Advisory
Here's the problem: when you go to sell those "collectible" coins, dealers typically offer only the spot price. The collectible premium evaporates.
Real Example: "Exclusive" Coin Markup
Spot Value: 1 oz gold = $4,350
"Exclusive" Coin Price: $7,830 (80% markup)
Buyback Offer: $4,250 (spot minus 2%)
Immediate Loss: $3,580 (45% of purchase price)
How Dealers Hide Markups
❌ "We Don't Charge Commission"
True—because they make money on the spread between what they pay for gold and what they sell it for. No commission doesn't mean no markup.
❌ "This Coin Is Limited Edition"
Limited edition often means "we minted it ourselves to justify a higher price." Unless it's from a major mint with documented scarcity, it's marketing.
❌ "Call for Pricing"
Red flag. Legitimate dealers post prices online. "Call for pricing" means they adjust based on how much they think you'll pay.
❌ "These Coins Aren't Reportable"
Dealers use IRS reporting rules as a fear tactic to push overpriced coins. American Gold Eagles and most standard bullion aren't reportable on 1099-B anyway.
How to Calculate Fair Price
Before you buy, do this math:
Fair Price Formula
Step 1: Check current spot price (Kitco, GoldPrice.org)
Step 2: Multiply by 1.03 to 1.05 (3-5% markup)
Step 3: Add $10-20 for shipping/handling
Result: That's your fair price ceiling
Example: Spot = $4,350
Fair range: $4,480 - $4,587
Walk away if over $4,600
Dealer Markup Comparison
Here's how major online dealers compare on a 1 oz American Gold Eagle (December 2025):
| Dealer | Premium Over Spot | Rating |
|---|---|---|
| SD Bullion | 4.8% | Excellent |
| JM Bullion | 5.3% | Excellent |
| APMEX | 6.2% | Good |
| Money Metals | 5.8% | Good |
| Typical IRA Company | 8-15% | High |
| Numismatic Dealers | 40-200%+ | Avoid |
The Bottom Line
Dealer markups are a fact of life in precious metals. Fair markups (3-5% on standard bullion) compensate dealers for legitimate costs. Anything above 10% on common products should trigger serious questions.
The biggest danger? Numismatic or "exclusive" coins with 40-400% markups. These are profit generators for dealers, not investments for you.
Always compare dealer prices, always know the spot price, and always ask what the buyback price would be before you buy.