Bid Price
Also: Bid, Buy-Back Price, Purchase Rate, Bid Side
The bid price is the price a dealer or market maker is willing to pay for a precious metal — that is, the buying price from the seller's point of view.
The bid price is one of the two central prices that market makers and precious metal dealers quote at the same time. It states the price at which the dealer is prepared to buy a metal. Anyone wishing to sell gold, silver or platinum receives exactly this price, less any further charges. Its counterpart is the ask price, at which the dealer sells the metal.
Bid and ask: two sides of one quote
In the professional bullion trade, the bid and ask are always quoted together as a spread. The difference between the two represents the dealer's implicit trading margin and is not itemised separately.
| Quote type | English | Perspective | Use |
|---|---|---|---|
| Bid price | Bid | Buyer (dealer) | Buying from the customer |
| Ask price | Ask | Seller (dealer) | Selling to the customer |
| Spread | Bid-ask spread | Difference | Market maker's margin |
Example: if gold is quoted at a bid of EUR 3,050 per troy ounce and an ask of EUR 3,065, the spread is EUR 15. A seller of one troy ounce receives EUR 3,050; a buyer pays EUR 3,065.
How the bid price is formed
The bid derives from the current spot price, which trades continuously on the OTC market in London and on COMEX in New York. Dealers adjust their bid constantly for factors such as:
- Liquidity and volatility: when uncertainty is high, dealers widen the spread and the bid falls relative to spot.
- Denomination and form: standard-size bars (e.g. a kilo bar) usually attract a keener bid than broken gold or jewellery.
- Fineness: only the fine weight (not the gross weight) is paid for. A 585 gold ring is valued proportionally — the fineness decides.
- Volume: wholesalers and institutional sellers obtain tighter spreads than private customers.
Formula: proceeds from a sale
Proceeds = bid price (EUR/oz) x fine weight (oz)
With the buying price calculator you can work out your specific sale proceeds on the basis of the current gold price.
Bid price versus a dealer's buy-back price
The bid is an interbank/wholesale term; a retailer's actual buy-back price is generally a little below it, because the dealer factors in a spread of their own. Consumers therefore rarely achieve the full interbank bid on a cash sale. Transparent dealers publish their buy-back price as a percentage of the current spot bid.
The bid in the LBMA fixing
In the LBMA fixing for gold (twice daily: the AM and PM fix) and silver, a single reference price is established — there is no separate bid and ask. This fixing price serves as a reference for long-term contracts, valuations and settlements. In continuous spot trading, by contrast, explicit bid and ask prices exist at all times.
In short
The bid price is the price at which you, as a private individual, can sell precious metals — it always sits below the ask. The tighter the spread, the fairer the trading terms. Before selling, it pays to compare several dealer quotes against the current spot price as a benchmark.