Most of the money lost on gold is lost at the moment of purchase, not in the market afterwards. Pay too much over the metal value and you start underwater by an amount the gold price has to climb before you break even.

The one question to ask

Every gold purchase, in every form, comes down to a single question: what is the premium over the metal value, and what am I getting for it? With a bullion bar the honest answer is refining, distribution and a dealer margin, and it is usually small. With jewellery it is design, labour, finishing and retail margin, and it is usually large. Neither is wrong. Paying a jewellery premium without realising you are paying it is.

Frequently Asked Questions

How much premium over spot is reasonable?

We have not found an authoritative published dataset for Canadian dealer premiums, so this hub does not quote a percentage. What we can tell you is the method: get the current metal price, work out the metal value of the exact item, and compare it with the asking price from more than one seller. The comparison tells you far more than any rule of thumb.

Is it safe to buy gold online?

It can be, from an established dealer with a physical address, a published buy-back price and a long trading history. The risks are counterfeit product, non-delivery, and paying a collectable premium for something that is really just bullion. Buying in person removes the delivery risk but not the other two.

Should I buy gold jewellery as a gift or as an investment?

As a gift. Jewellery bought to be worn and enjoyed is a good purchase judged on those terms. Jewellery bought as an investment is being judged against bullion, and it loses that comparison on price, tax and resale.

Where to next

• Back to the main gold guide