The Premium Structure of Gold Bars
Understanding why larger bars carry lower premiums helps you make informed purchasing decisions. For 10 oz bar buyers, knowing where your format sits in the premium hierarchy is essential.
Why Size Affects Premium
The costs that create premiums don't scale linearly with bar size:
Fixed costs per bar (roughly constant regardless of size):
- Assaying and certification
- Packaging (assay card, case)
- Individual handling
- Serial number tracking
- Dealer transaction processing
Variable costs (scale with gold content):
- Refining
- Raw material (gold itself)
- Storage space (somewhat)
- Insurance during transit
Because fixed costs spread across more ounces in larger bars, cost-per-ounce decreases as bar size increases.
Current Premium Ranges by Size
| Bar Size | Typical Premium | For $20,000 Gold Value |
|---|---|---|
| 1 oz | 3-5% | $20,600-21,000 |
| 5 oz | 2.5-4% | $20,500-20,800 |
| 10 oz | 2-4% | $20,400-20,800 |
| Kilo (32.15 oz) | 1-3% | $20,200-20,600 |
| 100 oz | 1-2.5% | $20,200-20,500 |
10 oz Bar Premium Analysis
At the 10 oz size, you capture most of the premium efficiency available to retail investors:
Compared to 1 oz bars:
- Save 1-3% on premiums
- For $100,000 in gold: $1,000-3,000 savings
- Maintain similar liquidity profile
Compared to kilo bars:
- Pay 0.5-1.5% more in premiums
- For $100,000 in gold: $500-1,500 extra cost
- Gain significantly better liquidity
- Lower per-purchase capital requirement
Factors That Affect 10 oz Bar Premiums
Refiner/Brand:
- PAMP Suisse: Higher premium, highest recognition
- Valcambi: High premium, excellent reputation
- Royal Canadian Mint: Premium for government backing
- Generic refiners: Lower premium, less recognition
Presentation:
- Sealed in assay card: Higher premium
- Loose bars: Slightly lower premium
- Tube of 10 (when available): Bulk discount possible
Market Conditions:
- High demand periods: Premiums expand
- Low demand/high inventory: Premiums compress
- Supply disruptions: Premiums spike
Purchase Size:
- Single bar: Standard premium
- 5-10 bars: Possible volume discount
- 20+ bars: Negotiate with dealer
Premium vs. Resale Spread
Remember that premiums work both ways:
Buying:
- You pay spot + premium (ask price)
- 10 oz bar at 3% premium = spot + 3%
Selling:
- Dealer pays spot - margin (bid price)
- Typical 10 oz bar buyback = spot - 1-2%
Total round-trip cost: 4-6% for 10 oz bars
This is why gold requires time to become profitable—you need the metal to appreciate enough to overcome these transaction costs.
Optimizing Your Premium Costs
- Compare dealers: Premiums vary significantly; always get multiple quotes
- Consider secondary market: Previously owned bars often have lower premiums
- Buy during quiet periods: Premiums compress when demand is lower
- Stick with recognized refiners: Lower premiums don't help if you face wide spreads when selling
- Think long-term: Premium differences matter less over decade-plus holding periods
The 10 oz Sweet Spot
For most individual investors, 10 oz bars hit the optimal balance:
- Premiums low enough to be competitive with institutional products
- Liquidity high enough to sell without difficulty
- Unit size large enough to build significant positions efficiently
- Capital requirement (~$20,000) accessible to serious investors
Unless you're investing $500,000+ in physical gold, 10 oz bars likely offer your best premium-to-liquidity tradeoff.
For current premium comparisons, explore 10 oz gold bar pricing from established dealers.