What premiums are and how to pay less

The premium is the extra amount you pay above the spot price. Paying a lower premium means more metal for your money.

What's in a premium

• The cost of making the coin or bar (minting, design, packaging).
• Shipping, insurance and storage along the way.
• The dealer's costs and profit.
• Supply and demand. When many people want to buy at once, premiums rise.

An example

If gold is $4,000 an ounce and a 1 oz bar costs $4,120, the premium is $120, or 3%. A 1 gram gold bar might cost 20% or more over its metal value, because making a tiny bar costs almost as much as making a big one.

How to pay less

1. Buy larger sizes. One 10 oz silver bar usually costs less per ounce than ten 1 oz bars.
2. Choose plain bullion. Generic bars and common coins cost less than collectible or proof versions.
3. Pay by check or bank wire. Many dealers charge about 3-4% more for credit cards or PayPal.
4. Compare several dealers. Premiums differ from store to store and day to day. Our compare page links to several.
5. Count shipping. Free shipping often starts at a minimum order. A small order with $10 shipping adds to your premium.
6. Consider pre-owned. Coin shops and private sales sometimes sell secondhand bullion for less.
7. Be patient. Premiums tend to jump during scary news and calm down later.

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