A gold premium is the amount you pay above the spot value of the gold in a bar or coin. Dealers sell above spot and buy back below it, so the price you pay, the premium and the buy-back price together decide how far gold has to rise before you are ahead.
Gold prices can fall as well as rise; past performance is not a guide; gold pays no interest. This explainer shows the maths with our own round numbers. It does not suggest buying gold.
What the Spot Price Is
“Spot” is the price for gold delivered now in the wholesale market, quoted in US dollars per troy ounce. A widely used reference is the LBMA Gold Price, set twice each London business day, at 10:30 and 15:00 UK time, through an electronic auction run by ICE Benchmark Administration. Dealers’ own spot quotes move continuously in between.
A troy ounce is 31.1034768 grams, heavier than an ordinary ounce. To turn a US dollar quote into Singapore dollars a gram:
S$ per gram = US$ per troy ounce × the US$/S$ exchange rate ÷ 31.1034768
At an assumed US$4,100 an ounce and US$1 = S$1.30 (both round illustration figures; gold closed October 2026 at US$3,913 on the LBMA PM price, according to the World Gold Council), that is S$5,330 an ounce, or about S$171.36 a gram.
What a Gold Premium Covers
The premium pays for turning wholesale gold into the item you hold, and for the dealer’s business:
- Refining or minting, and packaging such as sealed cards or capsules.
- Shipping, insurance and storage before the sale.
- The dealer’s costs and margin.
Smaller items carry a bigger premium per gram because many of these costs are per piece. Coins add design and minting. Our gold bars vs gold coins guide has an illustration.
The short version: the premium is your cost to get in, the buy-back discount is your cost to get out, and together they set the break-even rise. Compare all three, not just the headline price.
Worked Example: Premium, Spread and Break-Even
An illustration with made-up quotes, using the S$171.36-a-gram spot price above. You are quoted for a 100 g bar of 999.9 gold:
| Step | Working | Result |
|---|---|---|
| Gold content | 100 g × 0.9999 | 99.99 g |
| Melt value at spot | 99.99 g × $171.36 | $17,134 |
| Price quoted | $17,550 | |
| Premium | $17,550 − $17,134 | $416, or 2.4% over spot |
| Dealer’s buy-back today | $16,800 (about 2% below spot) | |
| Spread | $17,550 − $16,800 | $750, or 4.3% of the price |
| Break-even rise in gold | $17,550 ÷ $16,800 − 1 | 4.5% |
The break-even rise is larger than the spread because the buy-back starts from a lower base. As a rule of thumb, if the buy-back price is 95% of what you paid (a 5% spread), gold must rise 1 ÷ 0.95 − 1, about 5.26%, before selling back covers your cost. That assumes the dealer’s buy-back price moves in step with spot.
The gold premium calculator does these sums for up to three quotes at once.
Hidden Premiums: Card Fees, GST and Storage
Some costs do not appear in the headline price:
- Payment surcharges. As at November 2026, BullionStar adds 4% for card payments online (3.3% in its shop, 1% for NETS), while PayNow and bank transfers carry no surcharge from the dealer. Silver Bullion charges 3.5% for card payments in Singapore dollars and 4.5% in US dollars. On the example above, a 4% card fee lifts the cost to about $18,252, the effective premium to 6.5% and the break-even rise to 8.6%.
- GST. Qualifying investment gold is exempt, but jewellery and items that fail IRAS’s rules carry 9% GST. See GST on gold.
- Storage. Vault fees are charged every year. The cost of holding gold adds them up.
How to Compare Gold Premiums Fairly
- Take every quote at the same time, because spot moves constantly.
- Compare the cost per gram of pure gold, not the price per item.
- Ask for the buy-back price on the same item at the same moment. A low premium with a wide buy-back discount can cost more overall.
- Include how you will pay and whether you will store the metal with the dealer.
Our comparison of gold vs stocks vs bonds explains why these costs matter more for gold than for shares and bonds, which can pay income: there is no interest or dividend to offset them.
What To Do Next
- Note the spot price, then ask two or three registered dealers for the price and buy-back price of the same item.
- Run the numbers through the gold premium calculator, then the gold investment return calculator to add storage over the years you plan to hold.
- Pay by a method with no surcharge if the dealer offers one.
- Read how to buy gold in Singapore for the other routes, including ETFs with no premium on the metal.
- Do your own due diligence. This is general information, not a recommendation.
