How to Choose a Gold Trading Company and Avoid Scams

UBS executive Josef Stadler said at the Reuters Global Private Banking Summit that the fear of a downturn has led to a hike in demand for gold bullion, while boosting the appetite for exchange trade funds and mining company shares. This has resulted in the overnight growth of several intermediaries, which makes choosing the right gold trading company all the more important.

The unstable outlook for inflation, global growth and hard currencies has led to a five-fold increase of physical gold funds launched by Pictet in 2009. Stadler, who handles the services of Swiss banks for clients with assets of $50 million for investment, also said that these clients are not only investing in futures or ETFs but actually investing in physical gold.

UBS’ Stadler added that gold has become the staple for these ultra high net worth investors because of the high level of uncertainty in the economy. The chief investment officer of Julius Baer for Asia also supported this view and recommended that wealthy investors move at least a part of their assets to gold as a defensive measure against the concerns of currency weakness.

Choosing the Right Gold Trading Company
When you are looking to acquire gold, the first thing that you do is approach a gold trading company. But how do you know whether it is the right one for you? Here are some questions you need to ask when you are selecting a gold trading company.

  1. Is the company you are considering affiliated with the Better Business Bureau? Make sure that the gold trading company you are considering to do business with is a member of the Better Business Bureau. This will also help you know the company’s rating as given by the Better Business Bureau and also give you a good idea of how good they are at treating customers.
  2. How long has the gold firm been in business?
    Since late 2001, when gold prices actually began their bullish run, quite a large number of gold trading firms have come up in the market. However, it is best to deal with gold trading firms who have been in the business long enough to have experienced both good and bad times (at least 10 years).
  3. How committed is the gold firm to client education?
    You should do business with only those gold companies that make an active effort to educate their clients, through the telephone or through any other channel. You can look up the gold trading firm’s website and speak to the company’s representative to determine their level of commitment to educate their clients.

Gold Price Forecasts 2011
The big question everyone is asking is whether gold will continue to rise in 2011. Or is the spike just a short term oddity?

John Embry, the chief investment strategist for Sprott Asset Management, told Mineweb Gold’s podcast listeners if gold “is not between $1,500 and $2,000 over the next 18 months, I am dead wrong.” Embry’s forecast for gold prices is based on the lack of optimism for any sustainable recovery in the economy in the Western world.