Key points
- You usually buy above spot (the premium) and sell below spot (the spread). Together they are the round-trip cost.
- Storage and insurance are paid every year, and minimum charges make them heavier on small holdings.
- Sales tax or VAT on gold depends on the jurisdiction and the product. Where it applies and cannot be recovered, it is a cost too.
- The wider the total, the more the gold price must rise just for you to break even.
The cost layers, in order
| Layer | When you pay it | What drives it |
|---|---|---|
| Dealer premium | On purchase | Product type and size, quantity, dealer, market conditions |
| Sales tax or VAT | On purchase, where it applies | Jurisdiction, product definition (e.g. “investment gold”), buyer status |
| One-time fees | On purchase | Shipping, transit insurance, payment or transfer fees, vault deposit |
| Storage and insurance | Every year | Percentage of value, minimum annual charge, cover included or extra |
| Sale spread | On sale | How far below spot the buyer pays; product, condition, documents, location |
| Exit fees | On sale | Vault withdrawal, shipping, assay or authenticity testing |
Premium and spread: the round trip
In short: a dealer sells above the spot price and buys back below it. FINRA puts it simply: the difference between a dealer’s buy and sell price is the spread, each dealer sets its own, and the greater the spread and other costs, the more the price must rise before you make a profit.
Ask every dealer for both numbers at the same moment: the price to buy a specific product, and the price they would pay to buy that same product back. The gap between the two is the cost of a round trip if the gold price did not move at all.
Worked example over 3 years
Gold worth $50,000 at spot, a 5% premium, storage at 1% a year and a 2% sale spread, with no change in the gold price. The first table leaves tax out; the second shows the same purchase where a 10% tax applies, as an illustration only.
| Item | Amount |
|---|---|
| Metal value at spot (assumption) | $50,000 |
| Dealer premium (5%) | $2,500 |
| Sales tax / VAT | Not included (depends on jurisdiction) |
| Total purchase cost | $52,500 |
| Storage: 1% a year × 3 years | $1,500 |
| Sale spread (2% below spot) | $1,000 |
| Total costs over 3 years (no change in the gold price) | $5,000 · 10% |
| Item | Amount |
|---|---|
| Metal value at spot (assumption) | $50,000 |
| Dealer premium (5%) | $2,500 |
| Sales tax / VAT (10%) on metal + premium | $5,250 |
| Total purchase cost | $57,750 |
| Storage: 1% a year × 3 years | $1,500 |
| Sale spread (2% below spot) | $1,000 |
| Total costs over 3 years (no change in the gold price) | $10,250 · 20.5% |
Without tax, costs come to 10% of the metal value over the period; with a 10% purchase tax they rise to 20.5%. That is why it matters so much to know whether, and how, tax applies to your purchase.
Where tax fits in
Tax on buying gold is not universal. The EU’s special scheme exempts transactions in investment gold, with an option to tax for some traders, and UK guidance states that investment gold is exempt from VAT, subject to an option to tax. Other jurisdictions tax investment metals, and jewellery or collector coins are often treated differently from bullion. Find out which rule covers your purchase before comparing quotes — and compare quotes on the same basis, with or without tax.
Storage: the cost that keeps running
Storage is usually quoted as a percentage of value per year, sometimes with a minimum annual charge. On a small holding, the minimum can make the real rate several times higher than the headline percentage. Insurance may be included, extra, or limited. See storage options for what to compare.
How much must gold rise just to break even?
In the example without tax, the price would have to rise by about 3.32% a year for 3 years for the sale to cover every cost. With the 10% tax it would need about 6.6% a year. This is arithmetic, not a forecast — the gold price can just as easily fall.
Hidden or easily missed fees
- Card or bank transfer fees, and the exchange rate applied if you pay in another currency.
- Minimum storage charges, account fees and insurance that is “available” but not included.
- Withdrawal, delivery and re-testing fees when you take metal out of a vault.
- A wider buyback spread for products bought elsewhere, opened packaging or missing certificates.
- Collector or “limited edition” premiums that a buyer may not pay back.
Sources and verification
- FINRA — 10 things to ask before buying physical gold, silver or other metals
- LBMA — precious metal reference prices
- LBMA — Precious metal accounts (storage and maintenance fees)
- European Commission — VAT special schemes (investment gold)
- HMRC — VAT Notice 701/21: gold
Rates in the examples are illustrative assumptions, not market prices. Sources checked 15 November 2026.