Selling Price / Dealer Price
Also: Selling price, Issue price, Retail ask, Ask price (trade)
The dealer price is the price at which a precious metals dealer sells a product to the buyer - it is always above the spot price and includes minting or refining costs, the dealer margin and, where applicable, VAT.
The dealer price - also called the selling price or issue price - is the price a buyer pays a commercial dealer when acquiring precious metal products (bars, coins, granules). It is made up of the current spot price and a premium (agio) that covers all of the dealer's costs and margins. The dealer price is thus always higher than the pure raw material price on the international futures markets.
Composition of the dealer price
The dealer price arises from several cost layers:
| Component | Description | Typical order of magnitude |
|---|---|---|
| Spot price | Current market price of the troy ounce | Base (100 %) |
| Minting/production cost | Manufacturing effort for coins or bars | 1-4 % |
| Dealer margin | Distributor's profit mark-up | 1-5 % |
| Logistics & insurance | Transport, storage, insurance | 0.5-2 % |
| VAT (where applicable) | 18% on silver, platinum, palladium; 0% on investment gold | variable |
For investment gold, VAT does not apply in Malta (investment gold is VAT-exempt under Directive 2006/112/EC as transposed into Maltese law), so the dealer-price mark-up there is comparatively small. For silver, platinum and palladium, on the other hand, most dealers charge the full 18% Maltese standard VAT rate on the gross price. Some silver dealers alternatively apply margin-scheme taxation, under which tax falls only on the trading margin - this leads to an effectively lower mark-up but varies from provider to provider.
Formula
Dealer price = spot price x fine weight + premium (abs.) + VAT (where applicable)
Anyone wishing to know the pure metal value of a piece can determine it with the melt value calculator. The difference between melt value and the dealer price paid corresponds essentially to the premium.
Dealer price vs. buying price
The buying price is the counterpart: the price at which the dealer buys the same item back. The difference between the dealer price (sale) and the buying price (buy-back) is called the spread.
- Dealer price (ask): the buyer pays this price on purchase.
- Buying price (bid): the seller receives this price on resale.
- Spread: dealer price minus buying price - the implicit transaction fee.
A narrow spread (e.g. on 1-oz standard coins such as the Krugerrand) indicates a liquid, competitive market. Exotic products, collector coins or small denominations often have markedly wider spreads.
Factors influencing the dealer price
- Spot price movement: rising or falling precious metal prices affect the dealer price immediately.
- Denomination: small units (1 g, 2 g) carry proportionally higher production costs.
- Product type: minted bullion coins are more expensive than cast bars of the same weight.
- Demand situation: in times of crisis or supply shortages, premiums sometimes rise considerably.
- Dealer competition: more providers in the market push down margins and thus the dealer price.
Using the current gold price as a base figure and a comparison with the purchase price calculator helps buyers assess offers from different dealers objectively.
Tax notes (Malta)
The dealer price is, from a tax perspective, the acquisition price. It is relevant for calculating any gain on a later disposal. In Malta, no capital gains tax is levied on private disposals of movable assets such as precious metals, so a private gain on the sale of investment gold is not taxed; Maltese capital gains tax applies only to specific assets such as immovable property, securities and business interests. Note: this is not tax or investment advice - please contact a tax adviser for your individual situation.
In brief
The dealer price is the price actually payable for physical precious metal and always lies above the spot price. Anyone comparing offers should always consider the total price including shipping and taxes - the mark-up over the spot price is the decisive comparison criterion.