The bid-ask spread is the difference between the price a dealer sells metal at (the ask) and the price it pays to buy it back (the bid). It is the cost of a full round trip: buying today and selling later at an unchanged spot price.
Bid, ask and the spread in plain terms
Every UK bullion dealer shows two prices for the same coin. The ask is what you pay. The bid is what the dealer will pay you if you sell it back. The gap is the spread, and it is usually wider than the premium over spot alone, because the bid often sits below the spot price.
Example with fixed numbers
Assume spot is £1,600 per ounce (an illustration only). A dealer sells a 1 oz gold Britannia at £1,664 (4% over spot) and buys it back at £1,584 (1% under spot). The spread is £80, which is 4.8% of the purchase price. If the gold price does not move, you lose £80 by buying and selling. Gold has to rise by about 5% before you break even.
| Product | Typical spread | Why |
|---|---|---|
| 1 oz gold coins, larger bars | Narrow | Easy to resell, low handling cost |
| Fractional coins, small bars | Wider | Higher cost per gram |
| New silver coins | Wide | 20% VAT paid on purchase is not refunded on sale |
| Proof and collector coins | Widest | Dealers buy back near metal value |
How to keep the spread down
- Buy widely traded bullion such as Britannias, Sovereigns and Krugerrands. Dealers bid more for what they can resell quickly.
- Keep the original packaging and any certificate. Damaged or cleaned coins may be bought back at a lower price.
- Compare buyback quotes before you sell. Bids differ between dealers just as selling prices do.
- Avoid paying collector premiums on proof coins if you plan to sell to a bullion dealer.
Selling gold in the UK
When you sell, remember tax: gains on Britannias and post-1837 Sovereigns are exempt from Capital Gains Tax as sterling currency, while bars and foreign coins are chargeable assets (see <a href="VAT on investment gold">tax on investment gold in the UK). Our guide to getting a fair price when you sell gold explains buyback quotes and what to check. Before you buy, compare the delivered prices of gold coins with the buyback side in mind.
Related terms
Premium Over Spot Spot Price Bullion Numismatic Coins
FAQ
What is a typical spread on gold coins in the UK?
It changes with the market and the dealer, but popular 1 oz coins and larger bars have the narrowest spreads, while small coins, silver and proofs have wider ones.
Why do dealers buy back below spot?
The dealer has to cover handling, checking, storage and the risk of price moves before it resells the metal, so its bid is often at or below spot.
Is the spread worse on silver?
Usually yes, because new silver carries 20% VAT that you cannot recover when you sell the coins back.