Bullion Pricing, Delivery and Storage
Why is the Knox selling price higher than the spot price?
The short answer
The spot price is the market value of raw gold, while a coin or bar has to be refined, minted, transported, insured, held in stock and sold. A dealer's selling price adds a premium to the metal value to cover those costs and its margin. That is why every dealer's selling price, including Knox's, sits above spot, and why premiums differ from one product to another.
What the premium pays for
The premium is the difference between the metal value of a product and the price a dealer sells it for. It generally reflects the costs that sit between the refinery and your hands:
- refining, and minting or casting the coin or bar
- the producer's and wholesaler's own premiums
- secure transport, insurance and the cost of holding stock
- banking costs, staff, premises and compliance
- the dealer's margin
Why premiums vary
Premiums are not fixed. Smaller items usually carry a higher premium per ounce than larger ones, because production costs are spread over less metal. Widely recognised coins such as Krugerrands are produced in large numbers, which affects both their premium and how easily they can be resold. When demand surges, wholesale supply can tighten and premiums across the market can widen. Silver products often carry a higher premium relative to their metal value than gold, partly because silver is bulkier to move and store for the same value. Tax can play a part as well: silver bullion is generally standard-rated for VAT while gold Krugerrands are always zero-rated, but treatment depends on the product, so check SARS guidance.
How Knox sets its premium
The size of the premium on a particular product at a particular time is a Knox pricing decision, influenced by what Knox pays its suppliers and by market conditions on the day. Knox's bullion range includes gold Krugerrands (1 oz, 1/2 oz, 1/4 oz and 1/10 oz), gold bars (10 g, 50 g and 100 g), 1 oz silver Krugerrands and 1 kg silver bars. A price is confirmed only when you place an order under Knox's price and payment rules.
How to compare selling prices sensibly
Compare the total price for the same product, size and year, including any delivery or storage charges. Look at the buy-back price too, because the gap between buying and selling is what the market needs to cover before a holding shows a gain. A low premium is not the only consideration; a product's recognisability and resale demand matter as well.
How Knox handles this
Ready for the next step?
Speak to the Knox team about your situation. They will confirm current pricing, availability and requirements before you decide.
