Bullion Dealer Quotes Explained: Spot, Melt Value, Premiums, and Net Offers
A bullion dealer quote is the amount a dealer is willing to pay for a specific product, quantity and condition under stated terms. It is not automatically the same as spot or melt value. To compare offers, match the price-reference time, product description, inspection rules, deductions, payment method and seller-paid costs—then compare net proceeds.
- Spot is a market reference, normally quoted per troy ounce.
- Melt value is verified fine-metal content multiplied by the selected spot reference.
- Bid is what a dealer offers to pay; ask is the dealer’s selling price.
- Spread is the difference between bid and ask for the same product at comparable times.
- Net offer is what the seller actually receives after every disclosed deduction and seller-paid cost.
The five numbers people mix together
| Term | What it measures | What it does not guarantee |
|---|---|---|
| Spot price | A market reference for one troy ounce of a metal at a stated time | The price a retail customer can buy or sell every physical product |
| Melt value | Fine-metal quantity multiplied by the chosen spot reference | Collector value, retail replacement cost or a dealer’s final bid |
| Premium | An amount above a metal reference, often discussed on the retail side | A premium the owner will recover later |
| Dealer bid | The dealer’s current purchase offer for the identified item | A permanent price before the lock, receipt and inspection terms are met |
| Net offer | Gross bid minus disclosed deductions and seller-paid transaction costs | Final proceeds unless all terms and costs are fixed in writing |
The CFTC advises precious-metals buyers to check the current spot price, compare prices and fees, and get costs in writing. That same discipline helps sellers. A headline such as “we pay over spot” is incomplete unless it identifies the product, quantity, reference price, lock time and conditions.
Why a dealer offer may be lower than spot
Spot is not a standing purchase obligation. A dealer taking physical metal may need to verify it, fund the transaction, insure it, hold inventory, hedge price movement, ship it to another market or wait for a retail buyer. The bid also reflects how easily that exact product can be resold.
A quote can also be at or above melt when the dealer expects to recover a product premium. Sovereign bullion coins, scarce vintage bars and desirable collector coins may attract stronger bids. That is product-specific and can change with the market.
How the calculation works
Start by verifying fine-metal content. For a product containing exactly one troy ounce of fine gold, the melt reference is simple. For a 90% silver coin, fractional coin or alloyed item, first calculate the fine-metal quantity.
Estimated net proceeds = gross quote − testing, refining, shipping, insurance, wire or other seller-paid costs
Example: Dealer A quotes a higher gross number but requires the seller to pay insured shipping and a refining charge. Dealer B quotes slightly less but provides insured shipping and has no other deduction. Dealer B may produce the higher net proceeds. Compare dollars received, not just the most attractive phrase.
Ask when and how the price locks
A phone estimate, an online calculator and a locked trade are different things. Some dealers lock after a verbal or electronic confirmation. Others quote an estimate and set the price only after receiving and testing the metal. Either process can be legitimate when it is disclosed clearly.
Get answers to these questions:
- Which spot feed, bid or ask reference, currency and timestamp does the quote use?
- Is the offer a fixed dollar amount, a percentage of spot, or a fixed amount over or under spot?
- When does the price lock, and how long does the seller have to deliver?
- What happens if the package arrives late or the market moves?
- Which testing or inspection results allow the dealer to revise or reject the quote?
- Who pays shipping, declared-value coverage, refining, assay and payment fees?
- How and when will the seller be paid?
Agate’s separate guide on comparing bullion dealer buyback quotes provides the side-by-side checklist. This article is the terminology and process hub; that page is the worksheet for evaluating competing written offers.
Product description changes the quote
“One ounce of silver” is not a complete description. The dealer needs the manufacturer or mint, weight, fineness, product type, quantity, condition, packaging and—where relevant—year, mintmark and grade. A circulated Morgan Dollar should not be quoted as though it were a generic one-ounce silver round. A proof Silver Eagle should not automatically be priced as ordinary bullion.
Before requesting offers, use Agate’s guide on preparing coins and bullion for sale. Group like items, photograph them, retain assay cards and certificates, and do not clean coins.
Red flags in a bullion quote
- The dealer will not identify the product or quantity covered.
- The quote says “up to” a high number without explaining the normal bid.
- Fees and deductions are withheld until after the metal arrives.
- The dealer pressures you to ship before providing written inspection and return terms.
- A collectible coin is treated as scrap without allowing you to decline.
- A future buyback, profit or premium recovery is guaranteed.
- The dealer cannot explain where the reference price came from or when it was observed.
Practical rule: A good quote can be written as one complete sentence: “For this exact quantity and product, using this price reference at this time, subject to these inspection standards, we will pay this gross amount, deduct these costs and send payment this way.” If any part is missing, ask before shipping.
Online quote versus local counter offer
An online buyer may offer access to a larger market, while a local dealer may provide immediate inspection and eliminate shipping risk. Compare the complete process. Agate’s local-versus-online selling guide explains the tradeoffs, and the online silver-selling guide covers documentation and secure shipping.
Tax and information-reporting questions should be kept separate from the pricing calculation. Review Agate’s educational guide to bullion buyback taxes and reporting, then consult a qualified tax professional about your facts.
Frequently asked questions
Why is the dealer bid different from spot?
Spot is a market reference. The dealer bid applies to a specific physical product and reflects liquidity, verification, quantity, condition, inventory, transaction costs and current demand.
What is the difference between bid and ask?
The bid is what a buyer offers to pay. The ask is the seller’s offered retail price. Their difference is the spread when the product and timing are comparable.
Should I accept the highest price per ounce?
Only after checking deductions, accepted quantity, price-lock rules, shipping, insurance and payment terms. The highest headline may not produce the highest net proceeds.
Can a dealer change a quote after testing?
Only the written terms tell you. An estimate may be revised if weight, purity, authenticity, condition or description differs. Ask for rejection and return terms before shipping.
Does a retail premium guarantee a future buyback premium?
No. Future bids depend on market conditions and demand for the exact product. Do not assume the premium paid at retail will be recovered.
Sources
- CFTC: Avoid Problems When Buying Precious Metals
- CFTC and FINRA: 10 Things to Ask Before Buying Physical Gold, Silver or Other Metals
- Agate: Precious-Metals Price Charts and References
Disclosure: Spot prices, premiums, spreads, bids, fees, policies and inventory can change. This article is educational and is not a live quote, appraisal, tax advice or investment recommendation.