Generally speaking, the buying and selling of physical gold is based on the bid–ask spread. From my understanding of the interbank market, when buying, the price is typically set at the day’s benchmark gold price plus RMB 11 to RMB 15; when selling, it is usually the day’s benchmark gold price minus RMB 3. The benchmark gold price is published at 9:30 a.m. each day by the Shanghai Gold Exchange and is the same for all banks. Therefore, if you purchase physical gold, the bid–ask spread will be at least RMB 14 per gram. Taking the recent benchmark gold price of around RMB 340 as an example, the transaction fee can amount to as much as 4%. Consequently, if your goal is to profit from the spread, purchasing physical gold is clearly not recommended.

Safekeeping. If you’ve purchased a substantial amount of physical gold, it’s simply impractical to keep it at home—you’ll need to rent a safe deposit box. Of course, the cost isn’t exorbitant: typically between 300 and 500 yuan per year. And if you’re a gold-card customer at the bank, you’ll usually be exempt from the safe-deposit-box fee. That said, not every branch offers this service; in most cities, only a handful of branches within the same bank provide safe-deposit boxes, so location and accessibility become important considerations. Still, as long as you’re not tempted to touch your gold bars every so often, it’s really no big deal.

　　Author: Wei Heng

　　Source: Zhihu