WHAT IS GOLD SPREAD?

Spread is the difference between the buying and selling price



Example:

Spread for 10g LBMA gold bar:

Formula,

PG Sell - PG Buy
_______________      x    100%

        PG Sell


1866 - 1717 = 149

149 / 1866 = 0.0798 

0.0798 x 100% = 7.98%

So the spread will be ~8%

Translation:

The higher the spread the more expensive it is to trade with the seller while the lower spread will be cheaper and profitable.  To get the most profit from your precious metal is to trade heavier bars ie. 250g with have a much lower spread compared to 10g bar.

                                                                                   


It is also important to calculate the spread if you plan to sell off your bar/coin.

For example if you bought your 10g bar at let say RM1800 and you need to plan what price level do you intend to sell it.  RM1800 will have a spread of ~8% so if the gold price climb to RM1944 you only break even.  To gain profit you need to target higher price say 10% so as to gain 2% profit.  This is just a simplified example as other factors also need to be considered.

The Public Gold spread will more or less stay the same unless affected by major economic crisis or war.


Prepared by,
Wan Muhammad Yusri Bin Wan Alwi
Public Gold Authorised Dealer
PG00067660
SMS or Whatsapp: 012-8871702
wanyusri@gmail.com