Numerous investors lost substantial sums to deceitful coin dealers while seeking gold as an asset safeguard.
The call for physical gold is on the rise, driven by investors recognizing the value of including precious metals in their asset allocation.
On the other hand, this upturn has prompted the arrival of many bullion organizations, a lot of them want to deceive or exploit people.
Gold coin scams are a venerable problem and many customers still yield to such methods in the marketplace of gold. Here are the ways how to avoid these scams.
Confirming Gold Authenticity- How to Avoid Gold Coins Scams
Experienced jewelers employ the 'ping' test, tapping gold to detect a prolonged, high-pitched ring – authenticating its purity. Conversely, base metals yield shorter, duller sounds.
Employing a magnetic test is another method. Real gold (.999 fine) is non-magnetic, unlike fakes. A strong magnet can discern the difference; attraction suggests non-gold composition.
Grasping Your Purchase: Unveiling the Essentials
When making a purchase, it's vital to have a clear understanding of what you're acquiring, just as you would with any other transaction. Here are the two things you must remember to spot fake gold coins.
Price Awareness
For investors, comprehending the present market price of gold, or any other precious metal you're considering, is crucial whether you're entering a buying or selling position.
Notably, popular bullion items like the American Eagle, Canadian Maple Leaf, and South African Krugerrand often trade above the prevailing spot price.
Weight Recognition
Familiarize yourself with the method by which gold is weighed in the industry. The universally accepted unit of measurement is the troy ounce. A fake gold coin doesn't meet the required weight.
Distinctive Design
Each coin possesses its own distinctive design, characterized by intricate details that make counterfeiting extremely challenging.
When buying a gold coin, ensure that these intricacies are vividly apparent in every piece you aim to acquire.
Better Business Bureau or NFA Database
One effective way how to avoid gold coin scams. Notably, sellers of "physical" precious metals like gold or silver bullion aren't mandated to be licensed or trained by the National Futures Association (NFA).
To gauge a dealer's regulatory track record, consult the NFA database, revealing licensing status, sanctions, or bans.
Alternatively, the Better Business Bureau provides insights into a dealer's business duration, ratings, and reviews, offering further clarity on potential transactions.
Seek Diverse Payment Options
Contemporary enterprises embrace varied payment methods, and your dealer should follow suit. Payment avenues encompass customary cash, checks, money orders, and even streamlined bank transfers and credit cards despite surcharges.
Some dealers even accommodate digital currencies like Bitcoin and PayPal. Note potential timing disparities, as dealers often dispatch merchandise upon fund reception for these alternative modes.
Steer Clear of Rare Coins
Unlike gold and silver bullion, these coins don't typically sell below their spot prices. As a bullion investor, prioritize the ounces you possess over a coin's perceived rarity or aesthetics.
Scammers might pose as dealers, making false claims about a coin's history or value, employing "bait and switch" strategies, and using persuasive language to lure uninformed buyers into acquiring costly coins for investment. Stay vigilant against such tactics.
Validate Buyback Assurance
Anticipating future sales, a dealer's buyback policy is pivotal. Secure the option to resell your gold through your original dealer, enhancing convenience.
Prioritize dealers with such a policy, as it symbolizes their commitment beyond purchases. A trustworthy dealer remains accessible for both buying and selling transactions.
Assurance in finding a buyer for your gold is essential. Opt for dealers with a buyback policy for favorable rates and reliability.
Request Documentation
When purchasing bullion online, insist on impartial grading documentation. Reputable dealers possess such certifications. Prior to purchase, cross-reference with an unbiased source to confirm independence from the dealer's influence.
Opt for Established Dealers When Purchasing Gold Coins
Long-standing dealers inspire confidence, boasting reliability, size, and adaptability. Sizeable dealers manage higher volumes and offer enhanced flexibility.
Small dealers, conversely, may present limitations like restricted product choices, counterfeit gold coins, and delayed large order fulfillment. Some companies claim instant delivery which is too good to be true. Notably, their delivery turnaround lags compared to larger counterparts, who can ship within 2-4 days post-payment clearance. You can read reviews to detect counterfeit gold coins or fake gold coins.
Beware Unrealistic Offers
Should you come across an overly enticing bullion deal, exercise caution – it could likely be dubious. Watch out for extravagant incentives or exaggerated claims, prompting healthy skepticism.
Notably, precious metals coins like gold and silver bullion products generally adhere to spot prices, never legitimately below. Legit dealers enable the instant full-value sale of precious metals.
Opt for Established Dealers
When buying bullion coins or gold coins to a gold dealer, you have to prioritize dealers with a strong industry reputation, evident through recurring clientele – unsatisfactory experiences deter repeat customers. Seek guidance from online forums focused on gold and precious metal investment.
Members often share insights on deceptive dealers, aiding your avoidance of such entities. Remain cautious even if a website displays the Trustpilot logo; verify its authenticity by directly visiting Trustpilot's website and conducting a company search. Be vigilant, as the logo can be copied to deceive.
Swift Bullion Delivery
Timely receipt of precious metal bullion is essential. Avoid sellers deferring or prolonging delivery. Gold coins' value lies in their liquidity, enabling quick selling. Possessing physical coins empowers swift action when needed.
Conclusion
It is vital to know how to avoid scams in order to protect your money and investment. Make sure to follow the tips mentioned if you want to become successful in your investment in gold or purchase only authentic gold coins.
About Tim Schmidt
Tim Schmidt is an Entrepreneur who has covered retirement investing since 2012. He started IRA Investing to share his expertise in using his Self-Directed IRA for alternative investments. His views on retirement investing have been highlighted in USA Today, Business Insider, Tech Times, and more. He invested with Goldco.
