3 Shady Gold Investment Scams to Watch Out For

Gold is valuable anywhere you go. This very factor is why investing in gold coins and bullion is such a smart financial backup to hedge against inflation. Unfortunately, it also makes gold a target for con artists and scammers all around the world.

With something as tradable and valuable as gold, it is important to be familiar with some of the dirty tactics scammers employ to trick buyers into making unwise investments before you decide to jump into the growing gold market.

Here are a few of the most common gold investment scams to be wary of, as well as several tips on how to avoid them and ensure that you are buying smart:

The Grading Con: For gold coins, the designation of MS-70 means it is in “mint condition” and has never been handled. Because of they are in as perfect a state as possible, MS-70 coins are more valuable than other similar coins and fetch the highest prices. So what better way to raise the price of a coin than lie about its condition? Unsuspecting coin buyers are often unable to tell the difference between a true mint condition coin and fake, so they get duped into paying higher prices.

The Packaging Con: It’s wise to be very cautious about purchasing gold coins and other collectable items that are hidden behind “protective layers” or ornamental holders. Some disreputable coin dealers will use plastic coverings, fancy plaques, or even grading certificates to conceal a coin’s true quality. If you are using coins for decoration, this may be all well-and-good, but no serious collector or investor cares how the coins look when displayed. It’s all about quality and value.

The Imaginary Gold Con: Rather than vending off counterfeit coins, some audacious dealers attempt to sell coins that never even existed! This may seem unbelievable, but the con is really quite simple: the vendor sells to a nervous investor who is concerned about storing the gold in their own home where it can be stolen. The dealer offers the very “helpful” solution of storing the gold or keeping it in escrow. This way, the investor never sees the gold in person, and the vendor can even charge storage fees for the gold that doesn’t exist.

Tips for Avoiding Gold Investment Scams

To protect yourself from dirty scams like these, and many more, here is some valuable advice from the experts on how to safely invest in gold and other precious metals:

  • Do a general internet search of the company before you buy. Be sure to check the Better Business Bureau.
  • Before buying a MS-70 gold coin, confirm the coin’s grade by consulting a reputable independent source.
  • Be wary of opportunities to finance. Make sure to read the fine print so you aren’t surprised by hidden service and storage fees, or high interest rates.
  • If you do buy gold coins or some other precious metal, consider picking up your purchase personally and storing it yourself, rather than entrusting the company to do it.
  • Beware of the overzealous sales pitch! Think twice if a telemarketer or salesperson is pressuring you to act too quickly by saying you must buy now. Tactics like this are usually tell-tale signs of a scam.

The value of gold isn’t likely to come down any time soon, which means investors need to remain vigilant against shady scams and coin cons.

Just remember, you should never rush into a purchase you are uncomfortable with. Take your time, do your research, and get a second or third opinion. It may be a little extra work, but it will pay off in the end.