ITM Trading has a policy of transparency attached to every trade a client makes with us. Costs and spreads are always disclosed verbally and in writing before a trade is set or an invoice is mailed. Unfortunately, there are other companies who are not so forthcoming and honest in their trading practices, so you should be aware of some common gold scams to avoid in the marketplace.

Criminals, thieves, and scammers always look for a hot market to enter in order to make a quick buck. Gold has been on an eleven year hot streak, so many malcontents have had plenty of time to set their traps.  As a result, many “fly-by-night” operations have set up shop around the country. Some come and go; others linger on year after year amassing many unfortunate victims before their dishonesty comes to light. Some companies will send inferior product at highly marked up prices, while another may cash your check and send nothing at all. For this very reason you should perform your due-diligence and research any company you are considering purchasing gold or silver from.

Ideally, the company you choose should be very upfront in all costs of doing business. When asking about spreads and premiums, you should get the same answer each time you ask the same question. Take notes during your conversations with your representative so you are not relying on memory alone. Using a company that has been in business for at least a decade is suggested, as experience and longevity are key to this type of investment. All companies have some unhappy clients eventually, but dealing with a company that has a true track record of customer service and correcting mistakes is much more favorable than the alternative. Check with the Better Business Bureau as well as PCGS, NGC, and the American Numismatic Association before agreeing to enter into a purchase.

Some less scrupulous dealers will sell coins as “rare” coins when truly they are a rather common gold coin. Sometimes these are graded bullion gold coins (we do not suggest you purchase graded bullion) or older coins with a value close to bullion, but the seller may mark them up 50% – 100%. You will want to check prices at various companies to make sure you are entering a fair deal. The old adage “You get what you pay for” can come into play here as some companies give little or no advice or service for the best prices, while others will charge more for one-on-one services and building a personalized portfolio to best suit your needs, so make sure to take this into account.

With all of the recent advertising about selling your old unwanted gold jewelry we get a lot of inquiries about “cash for gold” transactions. ITM is not in this segment of the market, but we can make a few suggestions. While all companies need to make a profit, some cash for gold outfits pay only 40% of the spot price of gold, while others pay 50-75%. As you can see, again, due diligence is required to get the best price. If you are in the market to sell your old jewelry, we suggest you shop around and allow yourself enough time to realize a fair amount for your precious metals.

Just as there are many types of gold you can buy – from bullion coins and bars to very rare and collectible gold pieces – there are different reasons to own (or not own) each type. It is important to establish your goals, risk tolerance and timeframe before you enter in to the market so that a portfolio of metals can be built to suit your needs, rather than try to fit your needs to suit your portfolio down the line. For questions or concerns on this matter please call us.