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Last updated: July 3, 2026 · By Gold California Editorial
Quick answer: The dealer markup on a gold IRA is the percentage the dealer adds to its cost when your IRA buys a coin or bar. The spread is the round-trip cost of that same markup on the buy plus the discount the dealer takes on the eventual sell. Neither appears on the custodian statement. Federal court records in the Red Rock Secured consent order (CFTC press release 8898-24) put common-bullion markups in a 1 percent to 5 percent range, and documented fraudulent premium-coin markups at 91.89 percent to 129.97 percent over dealer cost. In dollar terms, a 5 percent buy markup on 95,000 dollars of common bullion is 4,750 dollars of day-one loss; a 91.89 percent markup on the same 95,000 dollars is roughly 45,528 dollars of day-one loss. The single defense is a written markup quote in percentage terms, on a specific product, before any wire moves.
Short on time? The essentials
- Markup is the percentage the dealer adds to its cost on the buy; the spread is the full round-trip cost including the discount taken on the sell.
- Neither figure appears on the custodian fee schedule or the IRA statement; both sit inside the metal price itself.
- CFTC press release 8898-24 quotes salespeople offering a 1 percent to 5 percent markup on common bullion and documents actual 91.89 percent to 129.97 percent markups on premium coins in the same case.
- The federal consent order in that case totaled over 56 million dollars in restitution, disgorgement, and civil penalty, and 950 customers paid 69 million dollars for coins worth about 30 million dollars.
- The bait-and-switch pattern quoted the low common-bullion range on the phone, then upsold "premium" coins carrying markups roughly 20 to 30 times higher.
- The IRS Publication 590-A rule that trustees' administrative fees do not count against the annual IRA contribution limit does not cover the dealer spread; the spread is inside the price, not a separate fee.
- Inside a California IRA, no California sales tax attaches to the owner because the custodian is the buyer, but the CDTFA Regulation 1599 rules still shape dealer economics outside the IRA.
- The single reliable defense is a written percentage markup on a named IRS-eligible product, on the dealer's letterhead, before any wire moves.
This page answers one specific question in depth. What does a California saver actually pay in dealer markup and round-trip spread on a self-directed gold IRA, and how do you get that number in writing before any dollars move? Every figure below traces to a primary source (IRS, CFTC, FTB, or CDTFA) and is cited inline. The dealer spread is the largest silent cost in most gold IRA setups, and the one federal court records document most clearly.
What markup and spread mean on a gold IRA
Two words describe the same underlying mechanic from different sides. The markup is what the dealer charges on top of its own cost when your IRA buys a coin or a bar. The spread is the wider round-trip figure: the markup on the buy plus the discount the dealer applies when the same coin or bar is later sold back.
Neither number is a fee in the custodian sense. They are baked into the per-ounce price of the metal, so they never show up as a separate line item on your account statement or the custodian's fee schedule. A 5 percent markup on a 10,000 dollar buy means your IRA holds metal that would fetch about 9,524 dollars if it were re-sold to the same dealer at cost the same day.
The round-trip spread is what a full buy-then-sell cycle costs. If the dealer marks up 5 percent on the buy and takes 5 percent off spot on the sell, the round-trip spread is close to 10 percent of the metal moved. On common IRS-eligible bullion, federal court records anchor the low end of the markup range at 1 percent to 5 percent (source: CFTC press release 8898-24, Red Rock Secured consent order).
Where the markup and spread hide on your statement
A California gold IRA statement shows an account value, the metals held, and the fees the custodian and depository charge. It does not show the markup the dealer took on the buy, and it will not show the discount the dealer applies on the sell.
The custodian's job is to execute the IRA's purchase order and hold the metal through an IRS-approved trustee arrangement (source: 26 U.S. Code 408(m)(3)). Pricing the coin or bar sits with the dealer, not the custodian. The IRS publishes no price ceiling and no markup cap.
That structural gap is why the dealer spread is often the largest lifetime cost on a gold IRA even when the annual custodian fee looks low. The custodian statement is honest about what the custodian charges. It is silent about what the dealer charged.
| Cost line | Charged by | Shows on statement? | Governed by |
|---|---|---|---|
| Account setup | Custodian | Yes, one-time | Custodian fee schedule |
| Annual custodian fee | Custodian | Yes, yearly | Custodian fee schedule |
| Annual storage fee | Depository | Yes, yearly | Depository fee schedule |
| Buy markup | Dealer | No, baked into metal price | Private contract; no IRS cap |
| Sell discount | Dealer | No, baked into buyback quote | Private contract; no IRS cap |
| Round-trip spread | Dealer | No, appears only as a value gap over time | Private contract; no IRS cap |
Sources: IRS Publication 590-A; CFTC press release 8898-24. Specific dollar amounts vary by custodian, depository, and dealer. Checked June 2026.
What the spread actually pays for
The dealer spread is not one number. It is a bundle of costs the dealer builds into the price to run a physical-metal business at a profit. Understanding those components makes the difference between a defensible 3 percent spread and a red-flag 30 percent spread easier to see.
On common bullion, the spread covers a short list of costs. Wholesale acquisition, shipping, and insurance are the base. Add refining or minting differentials, storage and handling before the coin ships, a small margin for adverse price moves, and the dealer's own profit. LBMA Good Delivery bars and American Gold Eagles have thin, standardized supply chains. That is why their markups land in the low single digits.
On premium or "limited" coins, the same components exist but the profit margin is expanded, sometimes drastically. The Red Rock Secured case documented markups on Canadian Red-Tailed Hawk coins running from 91.89 percent to 129.97 percent over the dealer's own cost, with no COMEX-comparable supply constraint to justify the gap (source: CFTC press release 8898-24).
The public benchmark from federal court records
The single most useful public reference on gold IRA dealer markups is the Red Rock Secured federal consent order. It is not a survey or an industry estimate. It is a set of numbers a United States district court entered as findings on April 23, 2024, and it is anchored to specific products and specific years.
The Commodity Futures Trading Commission press release quotes the company's own salespeople offering a "1% to 5% mark-up on common bullion products" as the phone bait. Once customers agreed to move retirement money, the company then sold Canadian Red-Tailed Hawk premium coins at markups of 91.89 percent to 129.97 percent over Red Rock's cost.
Federal court (Central District of California, Judge R. Gary Klausner) ordered defendants to pay 38,984,313.90 dollars in restitution, 5.1 million dollars in disgorgement, and 12.25 million dollars in civil penalties. The combined federal recovery topped 56 million dollars. The order covered at least 950 customers who paid over 69 million dollars for coins worth about 30 million dollars. The California Department of Financial Protection and Innovation was a co-plaintiff (source: CFTC press release 8898-24).
Two practical takeaways sit inside this record. The 1 percent to 5 percent range Red Rock used as the phone quote is a public bar for what common bullion markups tend to look like. And the fraudulent 90 to 130 percent range was documented only because federal regulators and California's DFPI investigated a single company; the same pattern can repeat under a different logo without regulator attention.
Gold IRA fee-drag calculator
Gold IRAs charge mostly flat dollar fees (setup, annual custodian, storage). Flat fees take a much bigger bite out of a small account than a large one. Enter your numbers to see the drag.
Estimate only. Fee amounts vary by provider and are often not published; enter figures you confirm in writing. This tool ignores metal price changes and the dealer spread, which also affect returns. Not financial advice.
The gap between what common IRS-eligible bullion costs to hold and what "premium" or "limited" coins cost to hold is the single largest variable in a gold IRA fee stack. The IRS treats both as eligible metal if they meet the fineness or named-coin rule, so the tax wrapper is identical.
Common bullion covers products with thin, standardized markups: American Gold Eagles under the 31 USC 5112 named-coin carve-out, LBMA Good Delivery bars, and other coins clearing the COMEX minimum fineness (source: 26 U.S. Code 408(m)(3)). Dealers move these in scale, at margins the Red Rock case pegged at 1 percent to 5 percent when quoted openly on the phone.
Premium coins occupy the opposite end of the market. They may or may not be IRS-eligible in an IRA (some pre-2013 Britannias, for example, are not), and they carry marketing narratives (limited mintage, direct mint relationships, exclusive artwork) that dealers use to justify higher prices. The Red Rock case is the public reference for how far those prices can drift from underlying metal value.
| Product | Markup quoted on the phone | Markup documented in the consent order |
|---|---|---|
| Common IRS-eligible bullion (Gold Eagles, LBMA bars) | 1 percent to 5 percent | Same 1 percent to 5 percent range (not the fraud vehicle) |
| Canadian Red-Tailed Hawk "premium" gold coins | Presented as a natural next step from bullion | 91.89 percent to 129.97 percent over Red Rock's cost |
| Canadian Red-Tailed Hawk "premium" silver coins | Presented as a natural next step from bullion | 91.89 percent to 129.97 percent over Red Rock's cost |
Source: CFTC press release 8898-24, Red Rock Secured federal consent order (Central District of California, Judge R. Gary Klausner). Numbers verbatim from the consent order. Checked June 2026.
The round-trip spread: markup on the buy, discount on the sell
A markup is a one-side number. A spread is a two-side number. When a California saver eventually sells IRA metal (to take a distribution in cash, to reallocate, or to close the account), the dealer or a buyback counterparty applies a discount to the price it offers.
The buy markup and the sell discount are almost never symmetric. A dealer can price the buy at spot plus 3 percent and quote a buyback at spot minus 2 percent, so the round-trip spread on the same coin is 5 percent even though each side of the trade sounds small. On premium coins the round-trip gap widens further because the buyback market for those coins is thinner.
Four moving parts sit inside every round-trip spread. First, the markup on the buy. Second, the discount on the sell. Third, wire and shipping fees on each leg. Fourth, any minting or restocking differential when the product changes hands. Only wires and shipping tend to appear as line items. The rest sit inside the metal price.
| Component | Charged by | Where it shows up | Typical range on common bullion |
|---|---|---|---|
| Buy markup | Dealer | Inside the per-ounce price the IRA pays | 1 percent to 5 percent over dealer cost (CFTC 8898-24) |
| Sell discount | Dealer or buyback counterparty | Inside the buyback quote against spot | Not federally documented; ask for it in writing |
| Wire and shipping | Custodian and depository | Line item on the custodian and depository invoices | Flat dollar per leg |
| Minting or restocking differential | Dealer | Inside the price change between buy and sell | Product-specific; higher on premium coins |
Sources: CFTC press release 8898-24; IRS Publication 590-A. Common-bullion markup range verbatim from the CFTC consent order. Checked June 2026.
How to get a dealer spread quoted in writing
The steps below describe the mechanics a California saver follows to get a dealer's markup and spread on paper before any wire moves. They are not personalized advice. Your tax advisor and a licensed financial advisor handle specifics for your situation.
- Name a specific IRS-eligible product first. Ask for a written quote on a specific 1-ounce American Gold Eagle, a 1-ounce LBMA Good Delivery gold bar, or another clearly identified common-bullion product. Vague "gold" quotes hide the markup behind product substitution.
- Ask for the markup in percentage terms, not just a dollar price. Request the percentage over the dealer's cost or over the current spot price, on the same day, in writing. A refusal to state a percentage is the pattern the Red Rock consent order documented.
- Request the sell-side quote too. Ask for the discount to spot the dealer would apply on a buyback of the same product today. The gap between the buy percentage and the sell percentage is the round-trip spread on that product.
- Compare against the CFTC public bar. The Red Rock case fixed 1 percent to 5 percent as the phone-quote range on common bullion. A double-digit markup on common IRS-eligible bullion owes you a documented explanation on paper.
- Ask what happens if you are steered toward a "premium" coin. Request the same percentage markup and sell discount on the premium product. The gap between the common-bullion percentages and the premium-coin percentages is exactly the exposure the Red Rock case documented.
- Get the quote on dealer letterhead or in an email trail. A written quote in an email, on a PDF fee sheet, or on dealer letterhead is admissible evidence if a dispute arises. Verbal quotes are not.
- Hold the wire until the paper matches the phone. The Red Rock pattern documented salespeople quoting 1 percent to 5 percent on the phone and delivering a 91.89 percent to 129.97 percent markup at settlement. Paper that does not match the phone quote is the moment to pause.
Reputable dealers state markups and buyback discounts on paper without friction. Hesitation, vague answers, or "we will explain on the call" are exactly the patterns the CFTC documented as fraudulent. Consult your tax advisor for your specific situation.
California sales tax inside the IRA versus outside
California treats precious-metals purchases differently inside a gold IRA than outside. The distinction changes the dealer economics that shape the markup you see quoted.
Outside an IRA, CDTFA Regulation 1599 sets the rule. Sales of gold or silver bullion are taxable unless the transaction qualifies for the bulk-sale exemption. As of July 1, 2023, the bulk-sale threshold is 2,000 dollars or more in a single transaction (source: CDTFA Regulation 1599). Below that threshold, the buyer pays California sales tax at the local combined rate.
Inside an IRA, the buyer is the IRA custodian, not the saver personally. No California sales tax attaches to the IRA owner because the transaction is between the custodian and the dealer. That structural feature explains why some California buyers accept a higher dealer markup inside the IRA wrapper than they would outside: the sales-tax saving on small-dollar buys can partially offset a modest bump in the spread.
The tax difference does not justify a double-digit markup on common bullion. It sets the context for why the choice between IRA and non-IRA purchase is often less about the tax wrapper than about the spread quoted on the same product. Whether that trade-off fits your specific facts is a question for your tax advisor.
Worked example: markup math on a $100,000 California IRA
When the spread math makes a gold IRA a bad idea
A balanced read has to name where the spread stack lands harder than savers plan for. Several patterns push the true cost above what a quick estimate suggests.
- Short holding horizon. A round-trip spread of even 6 percent (3 percent on each side) is absorbed once on the buy and once on the sell. A saver who plans to hold two or three years may pay the full round-trip out of a small total return.
- Frequent trading inside the IRA. Every buy or sell triggers the dealer markup and the sell discount again. Rebalancing between products or between metals compounds the spread quickly.
- Premium or "limited" coin upsells. The Red Rock case documented markups of 91.89 percent to 129.97 percent on premium coins after a 1 percent to 5 percent phone quote on common bullion. Any pitch that leaves common bullion for a "premium" or "collector" alternative deserves the same written percentage test.
- Small account against a fixed dealer minimum. Dealers that impose minimum ticket sizes or per-order fees load a higher percentage cost on a 25,000 dollar buy than on a 250,000 dollar buy, before markup even enters the picture.
- No written buyback quote. A dealer that will state the buy price on paper but will not state a buyback discount policy is exposing the saver to whatever discount the dealer chooses to apply at sale.
- Need to distribute within a few years. Selling out of bullion costs the spread on the way out, on top of any early-distribution tax stack. Under age 59 and a half, the federal 10 percent plus California 2.5 percent (source: FTB Form 3805P instructions) compound the exposure.
None of this makes a gold IRA wrong for California savers. It means the size of the account, the holding horizon, the choice of common bullion versus premium coins, and the dealer's willingness to put percentages on paper together set whether the math holds up. Modeling these before a wire moves is the sensible step.
Gold IRA markup and spread questions Californians ask
What is a fair dealer markup on a gold IRA in California?
Federal court records in CFTC press release 8898-24 quote salespeople offering 1 percent to 5 percent markups on common IRS-eligible bullion. That range is the public bar for what common-bullion markups tend to look like when a dealer states them openly. A percentage above that range on common products deserves a written explanation, and a percentage above 10 percent on common bullion pushes the outer edge of what the CFTC documented as reasonable phone quotes.
Is the dealer spread the same as the custodian fee?
No. The custodian charges a setup fee, an annual administration fee, and per-event wire or transfer fees. Those appear as line items on the custodian statement. The dealer spread is a percentage baked into the per-ounce metal price on the buy and the buyback quote on the sell, and it never appears on the custodian statement (source: IRS Publication 590-A).
Does the dealer markup count against my annual IRA contribution limit?
No. Publication 590-A states that trustees' administrative fees "aren't subject to the contribution limit." Dealer markups are baked into the metal price, not billed as a separate fee, so they do not consume any of your annual cap either. Brokers' commissions follow a different rule and do count against the cap, but a dealer markup on a physical metal purchase is not a broker commission. Consult your tax advisor for your specific situation.
Can I see the dealer markup on my IRA statement?
No. The IRA statement shows the account value, the metals held (by weight and product name), and the fees the custodian and depository charge. It does not show the markup the dealer took on the buy or the discount the dealer will apply on the sell. The only way to see those numbers is to request them in writing from the dealer before any wire moves.
Why were the Red Rock Secured markups so much higher than the quoted range?
The Red Rock consent order documents a bait-and-switch pattern. Salespeople quoted a 1 percent to 5 percent markup on common bullion on the phone. Customers then received Canadian Red-Tailed Hawk "premium" coins at markups of 91.89 percent to 129.97 percent over the company's cost.
The company falsely claimed a "direct relationship" with the Royal Canadian Mint and "limited quantity" status that did not exist. The gap between the phone quote and the actual sale is the exposure the case identified (source: CFTC press release 8898-24).
Do buyback prices have a legally required floor?
No. The IRS regulates the structure of a gold IRA (which metals qualify, who can hold them) but not the price a dealer offers on the buy or the discount a dealer applies on the sell. There is no federal or California floor on a buyback quote. The only reliable protection is a written buyback policy from the dealer stating the discount to spot before you commit to the initial buy.
How is the markup different on gold versus silver or platinum?
Gold and silver common bullion markets are the deepest, so common-bullion markups on standard products tend to sit in the 1 percent to 5 percent range CFTC records anchor. Platinum and palladium markets are thinner, so dealer spreads on those metals tend to be wider and to move more with industrial demand. Premium coins in any metal can carry markups far above the common-bullion range, as the Red Rock case documented on both gold and silver premium coins.
Is the round-trip spread the same as sales tax on a California gold purchase?
No. Sales tax is a state-imposed rate at the point of sale, set by CDTFA Regulation 1599 and its bulk-sale exemption threshold of 2,000 dollars per single transaction (source: CDTFA Regulation 1599). Inside a California IRA, no sales tax attaches to the owner because the custodian is the buyer. The round-trip spread is a private-dealer economic term describing the difference between the buy price and the buyback price; it applies inside and outside the IRA.
Sources
- Commodity Futures Trading Commission, Press Release 8898-24, Red Rock Secured federal consent order. Documented 1 percent to 5 percent common-bullion markup quote and 91.89 percent to 129.97 percent premium-coin markups; 38,984,313.90 dollars in restitution; 5.1 million dollars in disgorgement; 12.25 million dollars in civil penalties; 950 customers; 69 million dollars in coin sales; Judge R. Gary Klausner, Central District of California. Checked June 2026.
- Internal Revenue Service, Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs). Trustees' administrative fees are not subject to the annual IRA contribution limit and are not deductible as an itemized deduction; brokers' commissions rule. Checked June 2026.
- Cornell Legal Information Institute, 26 U.S. Code 408. Physical-possession-by-an-approved-trustee requirement under 408(m)(3); COMEX fineness reference. Checked June 2026.
- California Department of Tax and Fee Administration, Regulation 1599, Coins and Bullion. Bulk-sale exemption threshold of 2,000 dollars per single transaction effective July 1, 2023. Checked June 2026.
- California Franchise Tax Board, Early distributions. California 2.5 percent additional tax on early distributions, stacked on the federal 10 percent under age 59 and a half. Checked June 2026.
- California Franchise Tax Board, Form 3805P instructions. Reporting form for the 2.5 percent California additional tax on early distributions. Checked June 2026.
- Internal Revenue Service, Approved nonbank trustees and custodians. Reference to the Nonbank trustees list as of April 1, 2026; who can legally hold IRA gold. Checked June 2026.
