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Part of Bullion pricing guide: spot, premium, spread, and fees
How to calculate an all-in bullion price and break-even level
Calculating an all-in bullion price means adding premiums, storage fees, and assay costs, then finding the resale price that returns your money.
What to take away
- Convert weight to fine troy ounces with the exact NIST divisor, not a rounded one.
- Delivered cost is merchandise plus every unavoidable charge, divided by fine ounces.
- Premium is delivered cost minus the metal reference, in dollars and as a percent.
- Break-even needs a real net bid, meaning the dealer's number minus your shipping and insurance.
- Keep the raw inputs on the sheet so a later reader can redo the arithmetic.
The figures below are illustrative. Substitute your own quotes.
Convert the bar to fine ounces
A 20-gram bar stamped 999.9 fineness holds 19.998 grams of pure metal. Divide by 31.1034768 to get 0.64295 fine troy ounces.
NIST publishes the conversion factors for precious metal sales. It fixes the troy ounce at 31.1034768 grams, 20 pennyweights, or 480 grains, and requires metals priced by weight to be sold in troy weight or SI units.
Use the published divisor on every line. A worksheet that rounds to 31.1 on one row and 31.1034768 on the next is measuring two different ounces.
Record the metal reference
At an illustrative spot of $2,500 per fine ounce, that bar carries $1,607.38 of metal. Write down the feed you used, the time, the time zone, the currency, and whether the quote was delayed.
Add the purchase side
Show the numbers
| Merchandise | $1,670 |
|---|---|
| Payment fee | $0 |
| Tax | $0 |
| Shipping and insurance | $24 |
| Delivered cost | $1,694 |
Delivered cost is $1,694. Subtract the $1,607.38 metal reference and the premium is $86.62, or 5.39 percent.
Get a real bid, then net it
Ask a dealer what they will pay for that exact bar today. Suppose the bid is $1,565 and insured shipment back costs $18. Net exit is $1,547, and the round-trip gap against your $1,694 is $147, or 8.68 percent of what you spent.
Solve for the metal price
Assume the bid stays 2.64 percent under the reference and shipping stays $18. The equation is future reference times 0.9736, minus $18, equals $1,694.
That gives a required product reference near $1,758.42. Divide by 0.64295 fine ounces and the metal must reach about $2,735.70 per fine ounce, roughly 9.43 percent above where it started.
This is a scenario. The bid relation, the fees, the premium and the price all move.
Keep basis and premium apart
The CFTC's futures glossary defines basis as the gap between a commodity's cash price and its nearest futures contract. It notes that basis can reflect different periods, product forms, grades or locations.
A retail premium is not futures basis. Keep them separate so you never merge prices for two different deliverables into one number.
Run sensitivities
| Scenario | Net exit | Gap |
|---|---|---|
| Current bid | $1,547 | $147 |
| Bid improves $40 | $1,587 | $107 |
| Bid falls $60 | $1,487 | $207 |
| Shipping rises $12 | $1,535 | $159 |
One optimistic assumption should not control the answer. Widen the bid, add package damage, raise shipping, and lower premium recovery.
Restate everything per fine ounce
Totals hide scale, and the market quotes per ounce. Divide delivered cost by 0.64295 to get $2,634.73 per fine ounce. Divide net exit the same way to get $2,406.10.
The gap is $228.63 per fine ounce. Against the $2,500 reference you paid $134.73 above it and would realize $93.90 below it. Those two add to the gap.
Now a different bar, in a different size, can sit beside this one on a single line.
Write the limits next to the result
The sheet assumes the same bar comes back intact in its original packaging. It assumes the bid holds the same relation to the reference and that shipping stays at $18.
It excludes storage, insurance, any other carrying cost across the holding period, and tax, which depends on where you are and on your facts. Ask a CPA about your own situation.
It is one scenario, not a range. The reference, the premium and the bid relation move independently, and any one can cancel the other two. The output records what you paid and what you could recover on the day you ran it.
Common questions
Should tax go into the worksheet?
Include any tax you actually pay. How bullion is taxed depends on your jurisdiction and your facts, so confirm it with a CPA rather than assuming a rate.
Can break-even sit below the purchase spot?
It can, if the product premium strengthens enough to offset a weaker metal price. That outcome is not something you can count on, which is why the sheet shows it as a scenario.
Why use the net bid instead of the headline bid?
Net bid is the cash you would actually receive after shipping and insurance. Comparing it with cash you actually spent is the only like-for-like comparison.
How often should the worksheet be refreshed?
Refresh the reference and the executable bid together, at the moment you decide. A bid from last month tells you nothing about what a dealer will pay today.
