The bid-ask spread is the difference between the price a dealer sells a coin or bar to you (ask) and the price the dealer pays to buy it back (bid). It is the cost of a round trip, before any change in the gold price.
Bid, ask and the round trip
Australian dealers publish two prices for most products. The ask (or sell price) is what you pay. The bid (or buy-back price) is what they pay you. The ask usually sits above the spot price by the premium; the bid sits near spot or slightly below it.
Fixed-number example with spot at 4,000 AUD per ounce: a dealer sells a 1 oz Kangaroo at 4,200 AUD and buys it back at 3,960 AUD. The spread is 240 AUD, or 6% of the purchase price. If you bought and sold on the same day, you would lose that 240 AUD. Gold has to rise by about 6% in AUD before you break even.
| Product | Typical spread |
|---|---|
| 1 kg gold bar from a known refiner | Narrowest |
| 1 oz Kangaroo, Maple Leaf, Britannia | Narrow to moderate |
| Fractional gold coins | Wider |
| Silver coins | Wide in percentage terms |
| Proof and collector coins | Widest, often far from metal value |
What widens the spread in Australia
- Unknown or damaged products: dealers may test or discount a bar without a recognised brand, or a coin with scratches.
- GST-inclusive items: a Krugerrand bought with 10% GST is generally bought back on the metal value, so the GST you paid is not recovered. See GST on gold.
- Collector premiums: most dealers buy proof and coloured coins back at bullion value, not at the issue price. See numismatic coins.
- Cash sales: selling for $10,000 or more in physical currency triggers an AUSTRAC threshold transaction report, and dealers will ask for ID.
How to keep the spread small
- Buy recognised 99.99% products such as the Perth Mint Kangaroo or bars from LBMA-listed refiners.
- Keep original packaging and invoices; they speed up resale and support your CGT records.
- Get buy-back quotes from more than one dealer before selling.
- Compare entry prices with delivery included in the cheapest gold coins ranking, since a lower entry price shrinks the spread you need to recover.
To value what you hold before asking for quotes, multiply its fine weight by the live gold price in AUD. A buy-back offer far below that figure is a signal to shop around.
Related terms
Premium Over Spot Spot Price Numismatic Coins GST on Gold and Silver in Australia
FAQ
How much do you lose when selling gold back to a dealer?
You lose the bid-ask spread, the gap between what you paid and the dealer's buy-back price, which is smallest on large bars and well-known 1 oz coins.
Do dealers buy back at spot price?
Buy-back prices are usually close to or slightly below spot for recognised bullion, and lower for unbranded or damaged items.
Do I need ID to sell gold in Australia?
Dealers are AUSTRAC reporting entities and must identify customers in many cases, including cash transactions of $10,000 or more.