What is the difference between a selling price and a buy-back price?

Two prices, two directions

Bullion dealers quote prices from their own point of view. The selling price is the dealer selling to you. The buy-back price, sometimes called the bid or buying price, is the dealer buying from you. You may see both on the same pricing page, side by side, for the same product.

Why there is a gap

When a dealer buys back a coin, it takes on cost and risk: it must check the item, hold it, insure it and resell it, and the market can move against it in the meantime. The spread between selling and buy-back prices reflects those costs, the dealer's margin and the product's resale demand. Widely recognised products in good condition generally trade on a narrower spread than unusual items, damaged coins or products that must be refined before they can be resold.

What this means for you as a buyer or seller

If you buy a coin and sell it back soon afterwards, you will usually receive less than you paid, unless the gold price or exchange rate has moved in your favour by more than the spread. This is normal in physical bullion and is one reason many people treat it as a longer-term holding. Gold prices can fall as well as rise, so there is no guarantee that a later buy-back price will exceed what you paid.

What depends on Knox and on the item

Knox sets its own buy-back prices. The final amount offered for an item you sell also depends on its condition and on the outcome of inspection and testing. Knox's buy-back prices are based on the live international spot price, converted to rand. Krugerrands are bought at Knox's morning (AM) or afternoon (PM) price, and the final offer is confirmed after the coins or items have been inspected and tested. Before selling, ask for the current buy-back price for your exact product and check whether the figure is indicative or a firm offer.