What Premiums Should You Expect to Pay on Precious Metals?

What premiums should you expect to pay on precious metals? 

There are a few factors here…

For those new to investing in precious metals, the market value is typically expressed as a spot price per ounce. This price is constantly in fluctuation as gold and silver are traded live on the international market.

To own gold or silver in physical form, it is fabricated into coins and bars. The process of mining, refining, distributing, and storing bullion is costly and this is added to the price an investor ends up paying, in addition to a small profit margin which is typically expressed as a percentage above spot.

Unlike other products you buy like groceries and clothes, the markup on precious metals for the retail investor is pretty transparent if you're aware of the current spot price and what a typical margin is.

The best way to ensure you are paying a fair premium is to understand the current market conditions. This requires a bit of research and attention to what is going on in the precious metals markets, and what products are available for investors looking to add to their portfolio.

Not every gold or silver product is right for every portfolio or investor. It’s important to buy gold and silver bullion that meets your personal goals, whether you are buying gold for wealth insurance or profit. The right product for someone else could be the wrong option for you.

So what factors impact the premium?

Market-Driven Premiums
There are times when high demand and short supply mean higher premiums on every fabricated bullion product on the market.

Obviously, it’s better to buy when premiums are lower, but if you’re dollar-cost averaging or just want to get in the market, then you might bite the bullet and buy anyway. Here at ASI, we like to say there’s never a bad time to buy if wealth insurance is your goal!

Keep in mind that as you expect your precious metals to appreciate in value over the years, they should end up being worth much more than what you paid for them even with the premium.

In a market with reasonable demand, you should be keeping your eyes peeled for competitively priced premiums of 3-6% on gold bullion or 15-20% on silver. You may luck out with even lower premiums during bear market cycles, or you may find extremely high premiums when sentiment is high and gold and silver are extremely in demand. However, supply and demand timing may not always be 100% in correlation with the spot price. This is why it is essential to be aware of what is going on in the markets and keep an eye out for promotional offers... at times dealers may be stuck with too much inventory and offer low premiums to offload it even though demand is relatively strong. Or spot prices may be low, but a shortage of fabricated products could cause an explosion in demand and therefore premiums. 

Bullion Products
Sovereign coins like the American Eagle, Canadian Maple Leaf, and South African Krugerrand tend to carry a higher premiums than rounds and bars. This is because sovereign coins are legal tender and therefore have a minimum face value in addition to a melt value. Rounds are shaped like coins, but are not legal tender and therefore only worth their melt value. Bars tend to be the lowest premium option of all bullion products since they are the easiest to fabricate.

Certain products carry high premiums due to popularity, demand, or perceived exclusivity. If you want gold to act as a store of value in your portfolio, look instead for products with a comparatively lower premium. This may require you to do some price shopping or comparison, but in the end, your wealth will be better protected by choosing products that enable you to buy more gold or silver at a lower premium.

For instance, 1 oz. gold American Eagles are one of the highest selling bullion products on the market, but because of their popularity, they typically carry a much higher premium than other 1 oz. sovereign gold coins like the Canadian Maple Leaf, South African Krugerrand, or Australian Kangaroo.

Some buyers prefer the Gold Eagle for a variety of reasons… it’s American-made, it’s beautiful to look at, its content and purity are guaranteed by the United States government, and it can also be included in an IRA. They’re also instantly recognizable, and many buyers feel reassured that if they ever need to sell their gold coins, they’ll get fair market value.

This is 100% true, but when it comes to buying gold for wealth insurance, the best strategy is buying at the lowest premiums available, holding it, and letting time do the work over decades to increase your purchasing power. If other sovereign 1 oz. gold coins can do that for you, they’re likely the better option. The entry point is typically higher on sovereign coins than on bars, but the exit point tends to be higher as well. The spreads – the difference between your buy price and sell price – tend to be roughly the same.

Numismatics and Collectibles
Based on their rarity and collectability, you can expect to pay some of the highest premiums on genuine numismatics, but there's something to be cautious of when buying collectible coins like pre-1933 U.S. gold coins and pre-1965 silver.

In 1933, President Franklin Delano Roosevelt made it illegal to own gold. By Executive Order, the government confiscated gold from U.S. citizens, and it remained illegal to own it until 1975. One loophole in the Executive Order allowed citizens to keep limited numismatic or collectible rare coins. As a result, for many years since gold was once again legal for citizens to own, many rare coin dealers (not all) have tried to sell rare coins based on the fear of gold being confiscated again. Premiums on these coins could be outrageously high, and without a deep understanding of numismatics and the collectibles market, investors could easily be taken advantage of.

However, as of 1971, gold and the U.S. dollar are no longer convertible. So, there is no longer a reason for the government to confiscate, and you should not be scared into buying high premium rare coins to protect against that possibility.

When buying numismatics, you should always do your research and refer to trustworthy industry sources like the Numismatic Guaranty Company (NGC) and the Professional Coin Grading Service (PCGS) price guides. There are tremendously valuable coins in existence that are worth the premium their rarity and historic significance command, but make sure you're not being tricked into paying overly high premiums for "modern issue collectibles" which have no guarantee of future value above their melt value.

Red Flag: Too Low Premiums
High premiums carry a concern, but on the other hand, premiums lower than fair market value should also raise some red flags. In the private market, i.e. buying and selling between individual precious metals owners, there are bargains to be had from time to time. But if you’re buying from a gold dealer and the pricing sounds too good to be true… it probably is.

Sometimes, disreputable dealers will offer popular, easily researchable sovereign coins at an unbelievably low premium to hook a buyer, then also upsell a combination of obscure gold and silver coins that are hard to compare pricing on, and take advantage of the buyer’s inexperience and willingness to trust.

So, trust your instincts and eye any offer below current typical premiums with a healthy dose of suspicion.

What Are Premiums Like Right Now?
Surprisingly, despite gold gaining 27% in 2024 and on the rise once more in 2025, premiums are relatively low compared to recent market movement.

This is because sentiment and demand from western investors remains quite low. While safe haven buying due to geopolitical turmoil has buoyed prices over the past year, the main driver of this bull market has been central bank gold buying. Retail investors simply aren't making the plunge despite gold's stellar performance.

The absence of high premiums despite rising spot prices means that there is a genuine opportunity for investors looking for a confirmed positive trend to enter the market.

There's no mistaking that now is the right time to add gold to your portfolio. Or in a few year's time you'll be wishing you had. You cannot afford to be left behind.

Visit www.assetstrategies.com to view our wide selection of available products and live pricing. Or call 1-800-831-0007 to speak with one of our preferred client specialists today. They are standing by, available to help you uncover the lowest premiums available on your favorite bullion products.