Premium on gold: why the price per gram differs
Why does a gram of gold cost more in a 1 g bar than in a 100 g bar? The answer is the so-called premium – the mark-up over the exchange price of the metal.
What the premium is
The premium is the difference between the selling price of the product and the value of the metal itself. It covers the costs of production, minting, packaging, certification, distribution and the margin.
Why small weights have a higher premium
For smaller bars (1 g, 2.5 g) the fixed production costs make up a larger share of the price, so the price per gram is higher. Larger weights (10 g, 20 g, 1 oz) offer a more efficient price-to-gram ratio.
How to use the premium
You will value smaller weights for flexibility, gifts and gradual purchases; larger ones for efficiently building value. With coins, the year, design and demand can also affect the premium. Keep the premium in mind for a future sale and buy-back too. For more on the forms, see gold bars.
Disclaimer
This article is for informational purposes and does not constitute investment advice. More in the document Risk disclosure.
