Buying Price
Also: buy-back price, bid price, purchase price
The buying price is the amount a dealer or refinery pays a private seller for precious metals — it always sits below the prevailing spot price.
The buying price is the sum a bullion dealer, bank or refinery hands over to a private seller for their gold, silver, platinum or palladium. It is the mirror image of the dealer selling price and by definition lands beneath the current spot price, because the buyer has to factor in restocking costs, running expenses and the risk that the market moves against them before they resell.
Anyone offloading coins or bars should first check the live gold price or silver price so they can judge whether an offer is fair.
How the buying price is arrived at
Every buy-back calculation starts from the international spot market quote, which is set at the LBMA in London and on COMEX in New York. From that starting point the dealer subtracts several items:
- Trading spread — the gap between buy and sell that covers overheads and profit.
- Refining and testing costs — with scrap, jewellery or dental alloys the fineness must first be established (X-ray fluorescence analysis, fire assay).
- Price and inventory risk — the market can shift between purchase and onward sale.
- Product-specific adjustment — for collector coins carrying a premium the dealer may weigh in current demand.
In simplified form the calculation reads:
Buying price = spot price × fineness × weight − dealer deduction
For a 14-carat gold ring weighing 5 g gross (assuming a spot price of EUR 85/g):
Fine weight = 5 g × 0.585 = 2.925 g
Material value = 2.925 g × EUR 85/g = EUR 248.63
Buying price ≈ EUR 248.63 × 0.90 = EUR 223.77 (example, 10 % dealer deduction)
For your own items the exact figure is produced by the melt-value calculator or the buying-price calculator.
Buying price by product category
The size of the discount to spot depends heavily on how easily the material can be resold:
| Category | Typical discount to spot | Note |
|---|---|---|
| Standard coins (Krugerrand, Philharmonic) | 0 – 3 % | High liquidity, easy authentication |
| Common gold bars (LBMA Good Delivery) | 0.5 – 2 % | Instantly tradeable |
| Small bars (1 – 10 g) | 2 – 6 % | Higher unit cost relative to value |
| Jewellery / 14-carat gold | 5 – 15 % | Refining cost plus alloy analysis |
| Dental gold / dental alloys | 8 – 20 % | Labour-intensive processing |
| Broken gold, granules | 5 – 18 % | Swings widely with fineness |
Note: these ranges are guide values and vary by dealer, market conditions and quantity.
Distinguishing spot price, bid and buying price
The terms are often muddled in everyday use:
- Spot price — the current market quote on international exchanges for immediate delivery, usually per troy ounce in US dollars.
- Bid price — the rate at which a market maker buys on the interbank market; in wholesale only a few cents under spot.
- Buying price (retail) — the actual amount a private seller receives, including the full trading spread plus any assay and refining costs.
The spread between buying and selling price is therefore the key quality marker of any dealer offer.
Tax notes for Ireland
Selling investment gold (999 bars, standard bullion coins) is VAT-exempt in Ireland under the VAT Consolidation Act 2010. A private individual's gain on disposal, however, can be liable to Capital Gains Tax at 33 %, once the annual personal exemption of EUR 1,270 is used up. Unlike the German one-year rule under Paragraph 23 EStG, Ireland grants no holding-period relief — the gain is chargeable regardless of how long the metal was held. This is not tax advice; consult a qualified adviser for your own case.
Where a cash purchase reaches EUR 10,000 or more, the dealer must carry out customer due diligence under the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, which means presenting valid photo ID.
Getting the best possible buying price
- Gather quotes: obtain at least three offers — online buyer, local dealer and refinery.
- Watch the timing: selling while the spot price is high materially lifts the absolute proceeds.
- Identify the product: recognised coins attract better terms than obscure pieces, because the dealer avoids assay work.
- Bundle quantity: larger lots are frequently bought at keener rates.
- Know the fineness: for jewellery it pays to establish the fineness beforehand — via the hallmark (585, 750) — so you can scrutinise offers.
In brief
The buying price is always the figure from the dealer's perspective — they buy, the private seller sells. The more liquid and standardised the metal, the smaller the discount to spot and the fairer the result. A quick comparison against the live gold price or the melt-value calculator helps expose excessive deductions.