Before purchasing in precious metals, make sure you know the basics: what is spot, bid & ask, spread and premium?
The spot is the current market-clearing price of gold or silver set by supply and demand factors in the global financial markets. Spot price refers to 1 troy ounce of .999 fine gold or silver.
The bid (or buy as a layman’s term) is the price at which market participants, such as Tavex, are ready to buy gold or silver at any given time.
The ask (or sell as a layman’s term) is the price at which market participants, such as Tavex, are ready to sell gold or silver at any given time.
The spread is the difference between the ask and the bid price. For example, if the bid for a 1-ounce British Britannia gold coin is 1400£ and the asking price is 1410£, then the “bid-ask spread” is 10£. A low bid-ask spread is often a good indicator of high liquidity. Products with high liquidity, such as the Gold Britannia coin, will have a lower bid-ask spread than other less-known gold coins. This means that you will save money when trading in and out of your purchase.
Every product that Tavex sells comes with a premium. A premium is added to cover the cost of the production and distribution of the item. The premium is calculated by taking the price of a product minus the spot price of the metal. For example, if the current spot price of gold is 1420£, and if Tavex sells a 1 ounce Gold Britannia for 1470£, then the premium is 50£.
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