The gold buy and sell gap
Buy a piece of gold and sell it the same day and you lose money even if the ounce has not moved, because three things never come back: the making charge you paid, the VAT on it and on the gold, and the shop’s deduction when it buys from you. In Saudi Arabia VAT is 15% of the pre-VAT price, which alone creates a large immediate loss on any piece. The calculator works out the final purchase price with making and VAT, then what a shop would pay if you sold straight back at the raw gold value minus its deduction, and shows the gap in money and as a share of the purchase price. That share is roughly how far gold must rise for you to break even. It is why people buying gold to save are told to choose plain pieces or bars, and it is also the number to check before selling a piece you bought a few months ago. Expats deciding whether to buy gold before leaving the Gulf can use it to see what the move really costs.
What you lose if you sell it today
SAR 973
18.5% of the purchase price
| Purchase price with making and VAT | SAR 5,258 |
| Resale payout | SAR 4,285 |
| Of which making and VAT not returned | SAR 886 |
Checked by Radif Partners · How we calculate · Editorial policy
Where the loss comes from
Purchase price = gold + making + VAT on the total, as Article 2 of the Saudi VAT Law and Article 3 of the UAE Decree-Law provide. Sale price = gold minus the shop deduction. The gap is making, VAT and deduction, and has nothing to do with the market. The calculator prices both sides at the same ounce price from gold-api.com, so the result only reflects what the buyer pays the shop and the state.
How to narrow it
Negotiate the making charge before the piece is weighed; it is the only line open to negotiation. Pick a plain piece if you are saving. Keep the invoice, since it proves karat and weight when you sell. Ask about the exchange policy: some shops buy their own pieces back with a smaller deduction. The making charges page shows how to compare two offers.
When selling turns a profit
If gold rises after you buy, the higher raw gold value starts to cover the gap. The gold price history page shows how the ounce moved over ten years, but the past guarantees nothing, and gold can also fall for long periods.