The bid-ask spread is the difference between the price at which a dealer sells a bar or coin (ask) and the price at which it buys the same item back (bid). It is the cost of buying and then selling.
Bid, ask and your round trip
Every dealer shows two prices. The ask is what you pay to buy. The bid, or buy-back price, is what the dealer pays you. Both move with the spot price, and the gap between them is the spread, often shown as a percentage of the ask.
If you buy a coin and sell it straight back, you lose the spread. To break even, spot has to rise by at least that much in SGD. That is why bullion works better as a longer-term holding than as something you trade in and out of.
Worked example
Say a dealer sells a 1 oz Maple Leaf at 5% above spot and buys it back at 1% below spot. Your round trip costs about 6% of the metal value. On a 100 g bar the same dealer might sell at 3% above and buy at 1% below, a 4% round trip. These are illustrative figures to show the arithmetic, not current quotes.
What widens or narrows the spread
- Product. Well-known coins and Good Delivery-branded bars are easy for a dealer to resell, so they get tighter bids. Unusual products, damaged coins or bars without certificates get wider ones.
- Size. A 1 kg bar usually has a tighter spread in percentage terms than a 1 g wafer.
- GST. On non-IPM items you pay 9% GST when buying, but a GST-registered dealer buying back from an individual does not pay it to you. That turns the GST into part of your round-trip cost.
- Jewellery. When selling 916 jewellery, buyers pay for the fine gold content and deduct for refining. The workmanship you paid is not returned.
- Market stress. In fast markets dealers widen spreads to protect themselves.
Selling gold in Singapore: practical points
Ask for the buy-back price before you buy, and keep the original packaging and certificates. Dealers in Singapore that are regulated under the Precious Stones and Precious Metals Act must file a Cash Transaction Report with the police when they pay you more than S$20,000 in cash, including several same-day sales to the same dealer that add up past that amount, so expect to show ID. Payment by bank transfer avoids the cash threshold.
Use the SGD gold price per gram to check whether a buy-back offer is reasonable for the fine weight, and check premium levels in the gold investment range before you buy, as the premium you pay is the other half of the spread. Higher fineness and widely traded products generally keep both sides tighter.
Related terms
Premium over Spot Spot Price Fineness
FAQ
How much do I lose when I sell gold back to a dealer in Singapore?
You lose roughly the spread, the gap between what you paid and the dealer's buy-back price, which is lower for large bars and popular coins than for jewellery or unusual items.
Do I get GST back when I sell gold in Singapore?
No. If you paid GST on a non-IPM item such as jewellery or a gold Krugerrand, the buy-back price does not refund it, so it becomes part of your cost.
Do I need ID to sell gold for cash in Singapore?
Regulated dealers must report cash purchases from customers above S$20,000 and carry out customer due diligence, so you should expect to show identification for large cash sales.