Getty Images
Gold as an investment dates back to roughly 550 BC, long before modern investments like stocks and index funds, but it remains an important part of the investment landscape today. In fact, Americans generally believe gold to be a better long-term investment than stocks, savings accounts or bonds, according to a recent Gallup poll.
And, interest in gold is only growing now that the price of gold has been climbing. After breaking numerous records on its price run in 2024 — and a renewed upward climb since the start of 2025 — the price of gold now sits close to $2,950 per ounce.
However, that’s just the spot price of gold, which isn’t necessarily the same price you’ll pay as an investor. So, it’s important to understand how sellers set the retail price of gold, which is information you can use to find the best deal when shopping for your gold investment.
Learn more about how to start investing in gold now.
How is the price of gold determined by sellers?
The current price of gold is known as its spot price. But as an investor, that’s not typically the price you’ll pay.
“At its core, gold pricing follows a simple formula: Spot price + premium = Retail price,” says Nidhi Singhvi, co-founder and CEO of the jewelry store Sonolore.
The premium is an additional cost that’s added to the spot price to account for business costs, including production and distribution, as well as profit margins.
According to Singvi, dealers each set their own premiums and may adjust their retail prices as the spot price changes, which could happen daily. Retailers may also adjust their premiums to account for changes in the gold market, such as high demand or limited supply, even if the spot price hasn’t necessarily changed.
Another factor that can affect your costs is the physical form of the gold you’re purchasing. For example, the choice between gold bars and coins, as well as any additional designs included, may raise or lower your costs. Generally speaking, the simpler and less processed the gold you’re purchasing, the lower the premium will be.
“Here is where things get interesting and opaque — premiums vary wildly by seller,” says Singhvi. “A gold bar from a major retailer like Costco might have a lower markup than a boutique coin shop, while a luxury brand might charge an exorbitant premium.”
Gold differs from other popular investments in this way. For example, you wouldn’t expect the price of a popular stock or index fund to be markedly different from one broker to the next, but you could find stark differences in the price of gold. For that reason, it’s important to shop around to compare prices at various dealers. Make sure to add in any added costs, including shipping costs, transaction fees and storage (if applicable).
Find out how gold could benefit your investment portfolio.
Factors that affect the spot price of gold
When the spot price of gold increases, you can expect the retail price to rise along with it. Various factors can affect gold’s spot price. For example, just like any other asset, the price of gold generally follows supply and demand. If demand is high and supply is low, the price is likely to increase. Gold prices can also be affected by economic conditions, both locally and globally. Changes in interest rates, inflation and other asset markets can all play a role.
Additionally, the gold spot price may fluctuate in response to geopolitical events. The demand for gold — and, therefore, the price of gold — may increase during times of uncertainty like war or significant market downturns. Gold is traded all over the world, meaning events and economic factors in more than just the U.S. can affect its price.
Benefits of investing in gold today
“While prices have already reached record highs, macroeconomic factors suggest continued demand, supporting the potential for further gains,” says Joseph Cavatoni of the World Gold Council.
First, gold is considered a hedge against inflation, in part thanks to its limited supply. And while inflation isn’t as high today as it was just a couple of years ago, the latest data shows an uptick in the inflation rate.
And according to Cavatoni, gold can protect investors from far more than inflation.
“Given the current economic uncertainty, geopolitical risks, and volatility in risk assets, gold continues to prove its value as a safe-haven investment,” says Cavatoni.
Gold has plenty of other benefits worth considering, including portfolio diversification and liquidity, not to mention an increasing number of ways to invest. In addition to buying physical gold, investors can also opt for options like gold exchange-traded funds (ETFs) or gold mining ETFs.
The bottom line
If you’re going to invest in gold, knowing the spot price of gold isn’t necessarily enough. After all, dealers typically add a premium to the price, which accounts for things like business costs, profit margins, gold storage, and more. If you’re considering investing in gold, shop around for the best price — this can help you find a dealer that charges a lower premium. That being said, it is also helpful to monitor the current spot price and know which factors, from inflation to interest rate to market events, may impact it.
