How premium is computed
Three steps, all from your inputs:
- Fine weight. The item's gross weight is converted to grams (a troy ounce is 31.1035 g; a pennyweight 1.55517 g) and multiplied by fineness. That gives the pure metal content — the only part spot pricing applies to.
- Melt value. Fine weight × the spot price you enter. This is what the raw metal is worth, with no product attached.
- Premium. All-in price − melt value, in dollars and as a percentage. The calculator also derives the effective price per fine ounce (the honest way to compare products) and the bid breakeven: the spot price at which selling at your assumed dealer bid exactly returns everything you paid.
The breakeven is where premium stops being abstract: if you must wait for a large spot rise just to get your money back at a dealer's buyback price, the premium was the expensive part of the purchase — not the metal.
Karat & fineness reference
| Marking | Fineness | Fine metal share |
|---|---|---|
| 0.9999 gold (24K) | 0.9999 | 100.0% |
| 0.999 gold (24K) | 0.9990 | 99.9% |
| 0.9167 gold (22K) | 0.9167 | 91.7% |
| 0.750 gold (18K) | 0.7500 | 75.0% |
| 0.583 gold (14K) | 0.5833 | 58.3% |
| 0.417 gold (10K) | 0.4167 | 41.7% |
| 0.999 silver | 0.9990 | 99.9% |
| 0.925 silver (sterling) | 0.9250 | 92.5% |
| 0.900 silver (coin silver) | 0.9000 | 90.0% |
Karat values are exact fractions (14K = 14/24 = 0.5833). A European “585” hallmark is slightly richer; use a custom figure if your item carries one.
Why premiums differ between products
The same ounce of metal arrives at different prices depending on the form it takes. Government coins (American Eagles, Maple Leafs, Krugerrands) carry official backing, security features and the widest recognition, so they command the highest premiums — and often resell closest to spot. Private-mint bars and rounds are cheaper per ounce but may be bid lower when you sell. Fractional sizes (half, quarter, tenth ounce) multiply premium per ounce, because minting cost doesn't shrink with weight. And secondary-market worn coins trade below fresh-mint equivalents.
None of this makes a premium automatically good or bad — it makes it a liquidity decision. The calculator gives you the numbers both ways: what you're paying now, and what spot has to do before a bid-price sale recovers it.
Limitations
- Collector/numismatic value is ignored — this tool prices metal, not rarity or condition.
- The dealer bid percentage is your assumption, not a quote; spreads vary by dealer, product and volume.
- Spot is entered manually (default dated 2026-11-01); there is no live feed.
- Jewelry with stones or soldered parts will not match its marked weight.
- Estimates for information only — not an appraisal, offer, or investment advice.
Sources & methodology
- Unit conversions: troy ounce = 31.1034768 g; pennyweight = 24 grains = 1.55517384 g.
- Karat→fineness mappings per standard hallmark conventions (karat/24 exactly).
- Default spot prices: Kitco quotes, as of 2026-11-01, shown only as editable input defaults.
- All engine math is verified by hand-computed vectors in scripts/verify-metals.mjs (37 checks).
Frequently asked questions
What does premium over spot mean?
The premium is the amount you pay above the raw metal value of an item. Spot price multiplied by the fine (pure) metal content gives melt value; anything you pay beyond that is the premium. It covers minting, distribution, dealer margin, and market demand — which is why the same ounce of silver costs more as a government coin than as a plain bar.
Why do coins like the American Silver Eagle cost more than bars?
Government-minted coins carry official backing, anti-counterfeit design, and the widest recognition, which makes them easier to resell — sometimes even above spot. That liquidity is what you pay for. Bars and rounds from private mints usually carry lower premiums per ounce but may fetch less on resale. Neither is automatically better; the calculator shows what each choice costs you in premium terms.
Is paying a higher premium always a worse deal?
Not necessarily. Premium is partly a liquidity feature: widely recognized coins often resell closer to (or above) spot, recovering part of what you paid, while obscure products get bid lower. What matters is the round trip — what you paid versus what a buyer will actually pay when you sell. That is why the calculator shows the breakeven spot price at your assumed dealer bid, not just the premium percentage.
What is dealer bid, and why does the breakeven price matter?
Dealers buy from the public below spot — that buyback price is the bid. The breakeven spot is the metal price at which selling at your bid ratio exactly recovers everything you paid. If gold would have to rise substantially before you break even, you bought at a heavy premium; a small gap means you negotiated well or bought a low-premium product.
Why are troy ounces different from regular ounces?
A troy ounce (about 31.103 grams) is the traditional unit for precious metals and is roughly 10% heavier than the avoirdupois ounce (28.35 grams) used for food and mail. All bullion spot prices are quoted per troy ounce. Pawn shops sometimes quote per pennyweight (dwt, 1.555 grams) — the calculator accepts grams, troy ounces, and pennyweights so you can compare quotes directly.
Does a lower premium automatically mean a better buy?
It usually helps, but compare like for like. A low premium on a low-fineness item is not the same as a low premium on fine bullion, and price-per-fine-ounce is the honest yardstick — the calculator computes it. Weight, fineness, and what a buyer will pay on resale all matter alongside the headline premium percentage.