Testing the Gold Dealer
There are a couple of things you can test when you’re on the phone discussing a possible gold purchase from a retailer. Here are some things you should consider strongly before confirming a purchase:
Are you Absolutely Sure about the Product being offered?
There is nothing more important than to first familiarize yourself with the type of gold or silver products you wish to invest in. Well, there aren’t many products out there, but you should do some research into the type you want. Here is a list of the types of gold and silver bullions commonly bought and traded:
- American Eagle Bullion Coins
- Canadian Maple Leafs
- South African Krugerrands
- Austrian Philharmonics
- Australian Kangaroos
These gold and silver bullion products are some of the widely made coins. So, if your retailer tries to compel you to buy another type of coin and claims that this is somehow a far better option to consider, put down the phone and locate another dealer.
Acquaint Yourself with the Prices and Fees
Before you pay for your gold, an accredited and renowned retailer will always be able to tell you what the current price of the gold is, above the spot price of course, and whether or not you have to pay the taxes and fees associated with that type of bullion.
A good retailer will efficiently and accurately be able to quote an exact dollar amount for your purchase before processing the order.
When it comes to a business transaction it is necessary to make the deal with a financial establishment that you trust. So, if the retailer you are on the phone hesitates or fails to give an exact price on the gold bullion you are interested in buying, immediately hang up.
Will the Dealer Buy Back the Gold you are purchasing from them, and if so, What Price will they Offer?
This is one of the most important tactics when you talk about identifying a scammer versus a renowned and reputable gold retailer.
Gold scammers will always try to stick you products that have zero value or have a significantly lower value than what the scammers are asking for.
This means two things; the scammer will either never buy his own product back and/or buy at a considerably lower price than what he sold it at.
On the other hand, a legitimate dealer only earns a couple of percentage points on a gold transaction – which essentially means that he will always be ready to purchase his product back on a price that the dealer pays to his wholesalers.
Problems of Storing Actual Gold
When buying gold you do have another option, which is to physically store the gold at your home. A majority of people who have a rather pessimistic view of the economy – who believe that it could go down any time – value the physical possession of gold when including precious metals into their Individual Retirement Accounts.
Why? Well, they believe that if the economy begins to substantially plummet, they will be hanging on to physical gold, which would no doubt have a very high value.
Although you can do that too, the risk is just too much. For instance, you will have to first make all the necessary arrangements to store the gold safely in a vault or another secure facility that you own.
Secondly, with all that gold sitting in a vault in your home, it is impossible to expect to increase in value or earn any interest for you.
The only way you could make money with it is if the price of gold shoots up and you sell all or a portion of it.
However, if and when you decide to sell your gold, you will also have to worry about securely transporting it to the dealer or to the individual buyer, which could be risky as well.
You risk a high chance of losing it or getting it stolen along the way.