The premium is the amount above the spot price that you pay when purchasing physical precious metals. It is a normal and necessary part of buying real, tangible metal.
Why Premiums Exist
Producing physical coins and bars involves real costs:
- Mining and refining the raw metal
- Minting — designing, striking, and quality-controlling each piece
- Distribution — shipping, insurance, and logistics
- Dealer margin — the cost of operating a business
Typical Premium Ranges
| Product Type | Typical Premium |
|---|---|
| Large bars (100 oz+) | 1–3% over spot |
| Small bars (1–10 oz) | 3–7% over spot |
| Sovereign bullion coins | 5–10% over spot |
| Proof coins | 15–30%+ over spot |
| Numismatic coins | Varies widely |
Lower Premium = Better Deal?
Not always. Sovereign coins with higher premiums also command higher buy-back prices. The lowest-premium product is not always the best value when you factor in resale liquidity.