Gold premium over spot: what you pay above the spot price
Josef Tufan is the founder of KTsys Solutions.
KTsys Solutions builds software for the physical precious metals business, since 2009.
Last updated · Photo altered with AI.
The gold premium is the amount a buyer pays above the spot price of gold: it covers production, distribution, wholesale and the dealer's markup.1 Taxes come on top where a country levies them; investment gold is VAT-exempt in Germany, while India adds a 6 % import duty and a 3 % sales levy.2,3 When a dealer buys gold back, it pays its buying price, which is lower than its selling price; the difference is the spread.1 For the Mexican Centenario coin, one bank's spread reached 34% (secondary source)4 of its buying price on 15.06.2026.
Why do you pay more than spot for gold?
A buyer pays more than spot for gold because the spot price is a wholesale quote for unallocated gold in London, while a coin or bar has to be produced, distributed and sold by a dealer who adds a premium for these costs and a markup.5,1
The gold premium is one of three amounts between the spot price and the price a buyer pays: the premium, taxes, and the spread between a dealer's selling and buying price. According to the dealer CMI Gold & Silver, a lower advertised premium can still mean a higher final price when a dealer pads the spot price it starts from; buyers should compare final prices.1
From spot price to dealer price: the gold price chain
The gold price chain leads from the wholesale spot price through production, distribution and the dealer's markup to the price a buyer pays, with taxes where a country levies them:
- Spot price: the wholesale quote for unallocated gold in London, quoted as bid and ask.5
- Production: refining and minting the coin or bar.1
- Distribution and wholesale: from the mint or refiner to the dealer.1
- Dealer markup: what the dealer adds on top.1
- Taxes and duties: VAT, sales levies or import duties, depending on the country and the metal.2
Price chain calculator · enter your own values
Why the buy-back price of gold is lower than the selling price
A dealer buys gold back at its bid price, which is lower than the ask price at which it sells; the difference is the dealer's spread.1 How wide the spread is differs by dealer and product.
Bank spreads on the Mexican Centenario gold coin show how wide a spread can be: on 15.06.2026 one bank bought at 76,400 MXN/coin (secondary source)4 and sold at 102,400 MXN/coin (secondary source)4, a spread of about 34% (secondary source)4 of its buying price.
How taxes change the price of gold, silver, platinum and palladium
Taxes on precious metals differ by country and by metal: Germany exempts investment gold from VAT but charges 19 % on silver, platinum and palladium, India levies an import duty and a sales levy on gold, and the UAE zero-rates gold and silver of 99 % purity.2,3,6
| Market and product | Tax |
|---|---|
| Germany / EU: investment golddealer source | VAT-exempt (§ 25c UStG)2 |
| Germany: silversources conflict | 19 % VAT; margin scheme (§ 25a UStG) only in limited cases2 |
| Germany: platinum and palladiumdealer source | 19 % VAT2 |
| Germany: collector coinsdealer source | 7 % VAT if the price exceeds 250 % of the metal value7 |
| India: goldsecondary source | 6 % import duty + 3 % sales levy (GST)3 |
| China: gold | SGE trades VAT-exempt; from 01.11.2025 non-investment withdrawals get a reduced input-VAT offset (6 % instead of 13 %), valid 01.11.2025–31.12.20278 |
| UAE: gold and silver of ≥ 99 % purity in tradable formsecondary source | 0 % VAT6 |
| UAE: platinum of ≥ 99 % purityreported, not confirmed | 0 % VAT6 |
| UAE: palladiumreported, not confirmed | Not on the zero-rating list, so 5 % likely9 |
| UAE: jewellerysecondary source | 5 % VAT6 |
| Brazil: gold as a financial assetsecondary source | IOF of 1 %, once, at first acquisition; gains on a sale are taxed at 15 % (20 % for day trades)10 |
Not tax or legal advice. Verify with an adviser in each jurisdiction.
Frequently asked questions about the gold premium
Why do I pay more than spot when I buy gold, and get less when I sell?
When you buy, you pay the dealer's ask price: spot plus a premium for production, distribution, wholesale and the dealer's markup. When you sell, the dealer pays its bid price, which is lower; the difference is the spread.1
Does the gold price include VAT?
The spot price does not include VAT. In Germany investment gold is VAT-exempt, while silver, platinum and palladium bear 19 % VAT; other countries tax precious metals differently.2
What is a gold spread?
A gold spread is the difference between a dealer's selling price (ask) and its buying price (bid) for the same coin or bar.1
Is a low premium always the cheaper offer?
No. According to the dealer CMI Gold & Silver, a dealer that pads its spot price can show a lower premium and still charge a higher final price; compare final prices.1
Not tax or legal advice. Verify with an adviser in each jurisdiction.
Sources for this article on the gold premium
- CMI Gold & Silver, spot prices. Dealer, EN, accessed 11.11.2026.
- Kettner Edelmetalle, taxes. Dealer, DE, accessed 11.11.2026.
- Kitco / Reuters, Indian premiums. Secondary source, EN, published 02.04.2026, accessed 11.11.2026.
- Infobae México, coin prices. Secondary source, ES, published 15.06.2026, accessed 11.11.2026.
- LBMA, The Guide: An Introduction to the Global Precious Metals OTC Market. Primary source, EN, published 2017, accessed 12.11.2026.
- Stackcue, UAE VAT zero-rating. Secondary source, EN, accessed 11.11.2026.
- Kettner Edelmetalle, Umsatzsteuer auf Sammlermünzen: 7 % und die 250-%-Grenze. Dealer, DE, accessed 12.11.2026.
- World Gold Council, China VAT reform. Primary source, EN, published November 2025, accessed 11.11.2026.
- Hadef & Partners, UAE VAT update. Secondary source, EN, published 12.06.2025, accessed 11.11.2026.
- InfoMoney, gold taxation. Secondary source, PT, published 28.10.2025, accessed 11.11.2026.
- Rankia México, Centenario. Secondary source, ES, published 2026, accessed 11.11.2026.
- Infobae México, purchase limits. Secondary source, ES, published 27.07.2026, accessed 11.11.2026.
- MINING.COM / Bloomberg, silver lease rates. Secondary source, EN, published 27.10.2025, accessed 11.11.2026.
- BullionVault, tariff EFP. Secondary source, EN, published 31.01.2025, accessed 11.11.2026.
- Kitco, silver price. Price portal, EN, accessed 11.11.2026.
- ICE/IBA, LBMA Gold and Silver Price methodology. Primary source, EN, published January 2026, accessed 11.11.2026.