The premium over spot is the amount a buyer pays above the value of the metal in a bar or coin, usually shown as a percentage of the spot price. It covers production, distribution and the dealer's margin.
How to calculate the premium
Premium (%) = (price you pay minus metal value) / metal value x 100. Metal value is the fine weight in troy ounces times the spot price in SGD.
Take a 1 oz Kangaroo. It holds exactly one troy ounce of gold. If the final price is 4% above the SGD spot price for one ounce, the premium is 4%. For a 37.5 g tael bar, first convert: 37.5 g / 31.1035 = 1.2057 oz, then multiply by spot to get metal value.
What drives the premium in Singapore
- Size. Fixed production costs are spread over more metal in larger items, so a 1 kg bar usually carries a lower premium per gram than a 1 oz coin.
- Bar or coin. Minted coins cost more to make than cast bars.
- GST. An item that is not Investment Precious Metal, such as a gold Krugerrand or a proof coin, has 9% GST added on top of the price. That alone can make it far dearer than an exempt coin with the same gold.
- Supply and demand. Premiums rise when demand jumps, for example during sharp price falls when buyers rush in.
- Import and logistics. Coins shipped in from Australia, Canada or the US carry freight and insurance costs.
- Payment and delivery. Some dealers charge more for card payments or add delivery fees.
Compare final price, not headline price
A low advertised premium is not the full story. A dealer might show a keen price but add delivery, insurance or a card surcharge at checkout, or quote without GST on a non-IPM coin. The number that matters is the total you pay to have the item in your hand, divided by its fine metal content.
That is how metalsradar ranks offers: by the real final price including shipping. Check today's ranking of gold coins in Singapore by total cost, or compare a single product such as the 1 oz Gold Kangaroo across dealers.
Premium and buy-back together
A low premium matters less if the dealer pays little when you sell. Look at both sides: the premium on the way in and the dealer's buy-back price on the way out, covered in the entry on the bid-ask spread. Widely known coins like the Maple Leaf or Kangaroo usually keep a narrower gap than less familiar products. Compare also bullion with numismatic coins, where premiums can be several times higher.
Related terms
Spot Price Bid-Ask Spread Bullion Investment Precious Metals (IPM) and GST
FAQ
What is a good premium for gold in Singapore?
There is no fixed figure because premiums change with demand, but GST-exempt bars from large refiners usually carry the lowest premium per gram, and 1 oz coins a little more.
Why is the premium on gold coins higher than on bars?
Coins cost more to mint and ship per gram of gold than cast bars, and popular coins can be in short supply when demand rises.
Does GST count as part of the premium?
For non-IPM items such as the gold Krugerrand, GST at 9% is added to the price and raises the effective cost above spot, so include it when you compare.