Bid Price
Also: Bid, Purchase Price, Buying Rate, Bid Side
The bid price is the price that a dealer or market maker is willing to pay for a precious metal – i.e. the buying price from the seller's perspective.
The bid price is one of the two central prices that market makers and precious metal dealers quote simultaneously. It indicates the price at which the dealer is willing to purchase a precious metal. Anyone who wants to sell gold, silver, or platinum receives exactly this price – less any additional fees. Its counterpart is the ask price, at which the dealer sells the metal.
Bid and Ask: Two Sides of a Quote
In professional precious metal trading, the bid price and ask price are always quoted together as a price spread. The difference between the two prices represents the dealer's implicit trading margin and is not shown separately.
| Price Type | English | Perspective | Use |
|---|---|---|---|
| Bid Price | Bid | Buyer (dealer) | Purchase from customer |
| Ask Price | Ask | Seller (dealer) | Sale to customer |
| Spread | Bid-Ask Spread | Difference | Market maker's margin |
Example: If gold is quoted at Bid 3,050 €/troy oz and Ask 3,065 €/troy oz, the spread is 15 €. Anyone selling one troy ounce receives 3,050 €; anyone buying pays 3,065 €.
How the Bid Price is Formed
The bid price is derived from the current spot price, which is continuously traded on the OTC market (Over the Counter) in London and at COMEX in New York. Dealers continuously adjust their bid in response to the following factors:
- Liquidity and volatility: During periods of high market uncertainty, dealers widen the spread – the bid falls relative to spot.
- Denomination and form: Bars in standard sizes (e.g. kilo bars) typically command a more favourable bid price than scrap gold or jewellery.
- Fineness: Only the fine weight (not the gross weight) is compensated. A 585 gold ring is valued proportionally – the fineness is decisive.
- Volume: Wholesalers and institutional sellers receive tighter spreads than private customers.
Formula: Proceeds from Metal Sale
Proceeds = Bid Price (€/oz) × Fine Weight (oz)
The buying price calculator allows you to calculate your specific sale proceeds based on the current gold price.
Bid Price vs. Dealer Buying Price
The bid price is an interbank/wholesale term; the buying price of a retail dealer is generally somewhat lower, because the dealer in turn calculates their own spread. Consumers therefore rarely achieve the full interbank bid when selling for cash. Transparent dealers publish their buying price as a percentage of the current spot bid price.
Bid Price in the LBMA Fixing
In the LBMA Fixing for gold (twice daily: AM and PM fix) and silver, a single reference price is established – not a separate bid/ask. This fixing price serves as a reference for long-term contracts, valuations, and settlements. In ongoing spot trading, however, explicit bid and ask prices exist at all times.
In Brief
The bid price is the price at which you as a private individual can sell precious metals – it is always below the ask price. The narrower the spread, the fairer the trading conditions. Before selling, it is worth directly comparing several dealer offers against the current spot price as a benchmark.