Top 5 Scams to Avoid When Investing in Gold

There is a myriad of scams out there waiting for unsuspecting gold investors. While gold is a solid investment if it’s done correctly and with a reputable firm, investing with a snake oil salesman scares many people away from this profitable venture.

Beware of Gold Scams

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Here are the worst scams occurring in gold investments today, and how investors can spot these scammers in order to avoid them.

Hidden Fees

Gold Hidden Fees

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Often investors are promised fast, large returns on gold investments. Anyone who has invested before will tell you that with large and immediate returns come huge risks. Also, the promise of guaranteed returns sometimes means that the salesman is going to hit you with hidden fees.

Every day there are consumers being swindled into contracts that have concealed fine print stating that large sums of earnings will be considered commission for salesmen. What does this mean for investors? That huge return could be split in half or worse, making it much less sound than a stable investment with a reliable gold firm.

Selling History

Gold Selling History

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Many shady salesmen will try to convince investors that historically significant coins are the way to go, since they have the added sentimental and historical value that bullion lacks. However, these historical coins are often much more costly by weight than bullion, so bullion is the safer investment.

By tricking investors into buying coin investments, these salesmen are taking money out of the pockets of consumers. If you decide to invest in gold, stick to the melt value of gold (meaning its pure value rather than cosmetic importance).

Time Sensitive Investment

Time Sensitive Gold Investment

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 If gold is a safe and long term investment, then why would it be an urgent sell for anyone? Consider this carefully when you hear that a gold investment is ‘time sensitive’ or that ‘time is of the essence’ to make the deal.

Through thorough research and patience investors will find gold that is truly reliable and sound. These quick sales are often a bad idea.

Registration of Seller

Gold Seller Registration

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Before choosing a gold broker, make sure you know who you are dealing with. Check his or her registration with the National Futures Association, and also check the ratings and reviews of other investors. This is an easy way to safeguard investments and ensure reliability.

Has your broker been sanctioned previously for corruption? Be sure about his or her scorecard and you’ll find peace of mind when you finally commit to gold.

Fool’s Gold

Fool's Gold

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If you don’t want to find yourself feeling foolish and confused down the road, then get a deposit slip for your gold investment. While this sounds simple, many who have fallen prey to gold fraud have forgotten this step.

Because you will not be hiding gold bullion in your freezer behind the Hot Pockets, you will be entrusting a reputable depository. Getting a deposit slip to prove your ownership is of vital importance.

Investing in gold for your future and the security of mind that comes from being untied from the inflation of dollars is a good choice. However, investors should be wary of anything that seems too good to be true. Take your time, do the research, and check a company’s or broker’s reviews before committing your finances to gold.

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