Protect Yourself From Gold Investment Scams

You see the advertisements on the television and online, and you listen to them on the radio stations where they tout gold as a sound investment. But you must be aware of gold investment scams.

Gold companies often use Hollywood celebrities and high-profile personalities to promote their products. When a celebrity tells you to, “Invest in or buy gold with this company,” consider that they’re probably getting paid by their “favorite” precious metals company.

It’s accurate that people often use gold to diversify their retirement portfolios as hedge against inflation and economic uncertainty. But just how much gold to purchase, in what form, at what cost, and from whom, are essential questions to answer before you conduct that financial commitment.

The Federal Trade Commission (FTC), the nation’s consumer protection agency, states if you have an interest in purchasing gold, perform some due diligence before investing. Some gold promoters do not deliver what they offer, and may push individuals in to a financial investment that isn’t right for them.

All Glitters is not gold:

Gold Stocks and Funds: Buying stock in a gold mining firm or buying into a mutual fund that invests in gold bullion is a popular means to invest in gold. Many brokerage agencies buy and sell these financial instruments. Gold stocks and mutual funds could offer more liquidity than actual gold, and there’s no need for an investor to store or protect gold investments purchased in this particular form. That said, any type of gold stock or mutual fund investment could bring inherent risk and may drop in price regardless of the rate of gold.

Gold stocks and funds should solely be bought from licensed commodity brokers. Individuals can check the registration status and disciplinary history of every futures company or broker by getting in touch with the National Futures Association (NFA).

Bullion and Bullion Coins: Bullion is a bulk quantity of precious metal, typically gold, platinum, or silver, determined by weight and generally cast as ingots or bars. Dealers and some banks and brokerages sell bullion. Bullion coins are struck from precious metal– usually gold, platinum, or silver– and held as an investment. They are not utilized in everyday .

The market value of bullion coins is determined mainly by their precious metals content rather than by rarity and condition. Prices may change throughout the day, depending upon the prices for precious metals in the world markets. Coin dealerships and some banks, brokerage firms, and precious metal dealers buy and sell bullion coins. The U.S. Mint has created gold and silver bullion coins for investment purposes since 1986 and started manufacturing platinum bullion coins in 1997. The U.S. Mint guarantees the precious metal weight, content, and purity of the coins they produce.

Collectible Coins: These coins have some historic or aesthetic worth to coin collectors. Most collectible coins have a market value that surpasses their face value or their precious metal content. This collectible value is often called numismatic value. The coin dealerships who offer collectible coins frequently have valuable coins graded by professional services, but grading can be subjective.
Facts About Buying Gold

Regardless of the type of gold you might invest in, consider these important axioms:

1) The rate of gold varies over time. There is no assurance that gold will raise– or even sustain– its value.

2) The rates coin dealers, banks, brokerage firms, and precious metals dealers command for gold products, like bullion and coins, are usually higher than the value of the gold the items consist of. So it’s wise to analyze prices before purchasing.

3)Some sellers say that the government may seize gold. Others state that “reportable” transactions lead to confiscation. However other sellers claim that modern bullion coins produced by the U.S. Mint are subject to confiscation even though historic or collectible coins typically aren’t. These assertions in some cases lead individuals to buy historic coins at rates that surpass their value. No current federal law or Treasury Department regulation supports any one of these statements.

Investigate Before You Invest

So whether you are buying gold stocks and funds, bullion and bullion coins, or collectible coins, do your homework to begin with:

In case you are buying bullion coins or collectible coins, ask for the coin’s melt value– the fundamental intrinsic bullion value of a coin if it were melted and sold. The melt value for virtually all bullion coins and collectible coins is commonly available.

Speak with a reputable dealer or financial advisor you believe in who has specialized knowledge.

Get an independent appraisal of the particular gold product you are considering. The seller’s evaluation may be inflated.

Think about additional expenses. You might need to buy insurance, a safe deposit box, or rent offsite storage to protect bullion. These kinds of costs will cut into the investment possibility of bullion.

Some sellers ship bullion or bars to a protected facility rather than to a customer. Whenever you buy metals without taking delivery, take additional precautions to ensure that the metal exists, is of the quality outlined, and is appropriately insured.

Run away from sales pitches that diminish risk or sales representatives who claim that risk disclosures are mere formalities. Trusted sales reps are upfront about the risk of specific investments. Always get a receipt for your transaction.

Decline to “act now.” Any type of sales pitch that recommends you to buy right away is a sign to take a walk and hold on to your money.

Have a look at the vendor by entering the company’s name in a search portal online. Read about other people’s experiences with the firm. Try to connect offline if possible to clarify any specifics.

In addition, contact your state Attorney General and local consumer protection agency. This particular sort of investigation is prudent, although it isn’t fool-proof: it might be premature for an individual to recognize they’ve been ripped off or to have a gold investment scam with the proper authorities.

If you are considering moving an existing IRA or 401k into precious metals, we’ve done some of the due diligence for you. We reviewed 17 Gold IRA firms and rated Regal Assets number one. The firm has 750+ positive client reviews and impeccable consumer website ratings. Visit their website at

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