How to Calculate Premiums on Gold Coins


Hi, I’m Lynne, welcome to Chard TV. A question we are often asked by our
customers is: “What is a premium?” If we use gold as our example, quite
simply it’s the difference between the
intrinsic value of the gold content in the coin and the final price you pay. A premium can be expressed as an amount or a
percentage but in our experience a percentage is
the most useful. Especially when making comparisons
between the various coins or dealers. On most of our gold bullion
pages we give a table which shows the premium for the coins and the various quantities. This amount
is included in the final price but is shown so customers can make a
comparison. If we take one ounce Krugerrand as an example and for ease of calculation if we use a spot price of a thousand
pounds, then the value of the gold in that coin would be one thousand
pounds. If the final price was one thousand and fifty five pounds then the premium would be £55. £55 pounds above the intrinsic value of the gold in the coin. We can express this another way, as we’ve said before a 5.5 percent. Where does this extra
amount or premium come from and why do coins which contain exactly the same amount of gold come to different price? There’s a
variety of reasons this extra amount can come from
manufacturing, distribution and marketing costs. The
level of the coin’s availability versus its popularity in other words supply-and-demand and
price increases from manufacture at the coin travels
along the distribution chain. Smaller coins, fractional sizes and coins which are harder to produce
often command higher premiums as do the rarer coins or
coins with a numismatic interest. Manufacturing costs differ between
countries, an example being China. The Chinese Panda often has a higher
premium then say the Krugerrand or other popular
bullion coins as the Chinese mint have a higher premium and this is then passed along the chain.
We can have a look at some popular coins and compare the premiums which should help when you’re deciding how to get the best
from your investment. If we again use a spot price of the
thousand pounds and look at the percentage premium over
gold, it’s quite easy to compare and help when
deciding how best to invest. Our standard advice is look for the best value, go for the
lowest premium, within reason, and instead of comparing
prices, compare premiums. It’s also worth remembering the factors that should be taken into
consideration for when you’re thinking about selling. There’s the fluctuating gold price. Is your
product easily available and easily sold? What
percentage below or above spot are you likely to receive
when you sell your investment? Are you clearly looking at it from
investing point of view? Or are you looking at it from a collecting
or numismatic point of view? If the latter is the case then that’s another video. Thank you for
watching our video today, I hope you’ve enjoyed it. If you require more information, or have
any questions, please visit our website or subscribe to
our newsletter. Call us or visit us in our new showroom,
we’d love to see you. Follow us on Twitter, Facebook or YouTube for more videos Thank you and goodbye.

11 thoughts on “How to Calculate Premiums on Gold Coins

  1. Our latest video "How to Calculate Premiums on Gold Coins".
    A question we're often asked by our customers is "What is a Premium? In this video we explain what a premium is and how to calculate a premium when buying gold coins. This information will enable you to achieve the best deal for your money.
    We hope you enjoy it.

  2. do you have a website to purchase from ? I have Google searched and type www.chards.co.uk, can not see any products on the website, goldsoverign.UK is another site that comes up ?

  3. Ordered some coins through Lynne on the phone this morning, very pleasant and could not have been more helpful. Keep up the good work…

  4. How to calculate premium on gold and silver? Buy at spot anything you pay above that is a premium.. i just do not buy premium precious metals. I buy at the spot or i dont buy. I can see folks buying this stuff up at premium and im all for it. But remember your premium is killing your investment.

  5. What website would you suggest I sell some Silver Dollars other than ebay. There not rare but if I could sell for less than the 10% ebay fee. That's be great.

  6. Amo las monedas de oro. Tengo algunas las colecciono te felicito por el video. Y saludos desde BOGOTÁ Colombia, este es mi canal te invito a que suscribas éxitos.

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