If you are searching for the price of gold or silver online, you might come across different prices. For example, a quick google search might show that gold is $2,036, but a trusted dealer might list it as $2026.50. This is determined by market makers (e.g., COMEX). If this is not confusing enough, what about when you see two prices next to each other, such as, $2,020.85/ 2,025.16? This is the bid/ask price.
The first number, the bid price, refers to the price at which a buyer is willing to purchase a specified quantity of gold or silver at a given moment. It represents the demand side of the market, indicating what buyers, like precious metals dealers, are willing to pay you for the product you already own.
On the other hand, the second number, the ask price, represents the price at which a seller is willing to sell their gold or silver. It reflects the supply side of the market, indicating the price at which precious metals dealers are willing to part with their precious metals.
Important note: The Bid and Ask prices typically do not include any premiums that may be involved in the transaction.
Typically, the bid price will be lower than the ask price. The difference between these two prices is known as the "spread." This spread accounts for various factors, such as market conditions, supply and demand dynamics, and trading costs. It is also a useful tool when researching precious metals dealers, as an abnormally large or small spread might raise a red flag.
There are many factors in finding the right dealer, and the bid/ask spread is simply one of them. Vaulting fees, shipping fees, customer experience are just a few of those factors to take into consideration. At My Gold Advisor, we are dedicated to giving you the best experience possible at wholesale prices. To learn more, give us a call at 800-846-6280.
