Inside the Spread: What Your Bullion Dealer in Melbourne Isn’t Telling You About Buy-Sell Margins

You walk into a shop, check the gold price, and feel ready to buy. Then something feels off. The price to buy looks higher than expected, and the price to sell looks lower than you imagined. That gap is not random. It is the spread, and it quietly shapes your entire investment.

Any experienced bullion dealer Melbourne builds their business around this margin. The problem is most first-time buyers never ask about it.

Let’s break it down so you can spot a fair deal without second-guessing yourself.

What is the spread?

The spread is the difference between the price you pay and the price you receive when you sell.

For example:

Spot price: $1,000

Buy price: $1,040

Sell price: $980

That $60 difference represents the dealer’s margin. It covers operating costs and profit. Every bullion dealer Melbourne uses this structure, but the size of that gap can vary a lot.

Your goal is not to avoid the spread. Your goal is to recognise when it stays within a reasonable range.

Typical spread percentages for gold vs silver

Gold and silver behave differently in the market.

Gold: usually sits between 3 and 5 percent

Silver: often ranges from 6 to 12 percent

Silver spreads run wider because the metal costs less per unit. Dealers handle more pieces, store more volume, and deal with higher relative costs. Gold holds more value in smaller sizes, so dealers can work with tighter margins.

If you compare both metals side by side, gold almost always offers a more efficient entry point when it comes to spreads.

Why spreads vary by product

Not all bullion products carry the same pricing structure.

Coins vs bars

Coins cost more to produce and often attract collectors. That demand pushes premiums higher and widens the spread. Bars usually offer better value, especially in larger sizes.

Sovereign vs private mint

Products from trusted names like the Perth Mint move faster in the market. Buyers recognise them, which helps keep spreads tighter.

Private mint products can cost less upfront, but resale demand may vary. That uncertainty can widen the spread.

Size of the product

Smaller pieces almost always carry higher margins. A 1 gram bar costs more per gram than a 1 ounce bar. The same applies when you sell, so size plays a direct role in your return.

What counts as reasonable vs exploitative?

This is where you need to stay alert.

Reasonable:Gold: 3 to 5 percent

Silver: 6 to 10 percent

Borderline:

Gold: 6 to 8 percent

Silver: 10 to 15 percent

Exploitative:

Over 10 percent on gold

Over 15 percent on silver

If a bullion dealer prices above these ranges without a strong reason, they rely on buyer inexperience.

How volume affects spreads

Volume changes everything. Small purchases come with the highest margins. As your order grows, the spread tightens.

Dealers reduce their margin on larger deals because fixed costs shrink relative to the transaction. The same logic applies when you sell. Larger quantities give you more leverage and better pricing.

When you can negotiate

Many buyers assume pricing stays fixed. That is not always true.

You can negotiate when you buy in larger quantities, compare quotes, or build a relationship with a dealer. Payment methods can also influence pricing, especially if they reduce transaction fees.

Ask directly for a better price. A confident buyer often gets one.

Final thoughts The spread determines how long it takes to break even and how much you gain when you sell. Once you understand it, you stop guessing and start making informed decisions. A good dealer will explain their pricing clearly. If they avoid the conversation, you already know what to do next.