Spot Price Foundation
The value of a 1 oz gold bar starts with the spot price of gold. The spot price represents the current market price for immediate delivery of gold, quoted per troy ounce. This price fluctuates throughout trading hours based on global supply and demand.
Spot prices are determined by trading on major exchanges and over-the-counter markets worldwide. You can find current spot prices on financial news sites, precious metals dealers, and gold price data providers.
Understanding Premiums
When you buy a 1 oz gold bar, you pay the spot price plus a premium. The premium covers refining costs, fabrication, dealer margin, and market conditions. Premiums on 1 oz bars typically range from 3-8% over spot, though this varies by brand and market demand.
Premiums tend to rise during periods of high demand or supply constraints. Conversely, premiums may compress when demand is lower or supply is abundant. Shopping across multiple dealers can help you find competitive pricing.
Calculating Total Cost
To calculate what you will pay for a 1 oz gold bar, multiply the spot price by (1 + premium percentage). If spot is current spot price and the premium is 5%, the bar costs current spot price. Remember to factor in shipping and any applicable taxes.
When selling, you receive the spot price minus a dealer spread. The spread compensates the dealer for their costs and risk. Typical buy-back spreads range from 1-3% below spot for standard bars from recognized refiners.
Price Fluctuations
Gold prices can move significantly over short periods. Daily swings of 1-2% are not unusual, and larger moves occur during market volatility. The price you see today may differ from the price tomorrow or next week.
If you are buying or selling, get a live quote rather than relying on stale prices. Dealers typically lock in prices for a short window once you commit to a transaction.