Protect Yourself When Buying Gold

Throughout history, gold has been treasured, and as such, has always been a top choice for investing. With the value of gold as high as it is today, it is becoming more important than ever that you protect your investments and know you are actually getting what you paid for. 

Protect Yourself When Buying Gold

There are plenty of scams out there, so you must protect yourself. There are things you should pay close attention to when buying or investing in gold.

If it sounds too good to be true, it probably is

Precious metals are never sold at a discount. Anyone claiming to such a claim should be avoided. Gold is priced according to future value estimates, so underpriced gold is either acquired through illegal means, does not meet gold delivery standards, or will be delivered much later than expected. If you are buying gold which will not be shipped, but stored on site, be wary of low storage fees. 

While it might not sound like a big deal, there are some unscrupulous companies who pool accounts, and do not completely cover all investments with bullion.

It is easier to counterfeit gold coins and bars than it is to counterfeit paper currency. Tungsten, which is close in composition to gold, is used to fill holes drilled in gold bars. 

Gold bars should be pure gold (99.99%), and should not be alloyed with any other metal. If there is any question to the representation of purity or weight of an item, or if there is no representation at all, you should back away and leave. 

Reputable dealers will always have proper documentation and proof of purity and weight of their precious metals.

Leasing gold is another questionable practice. While it is not prohibited, it can be used to take advantage of less savvy investors. There may be little or no bullion backing your invested money, which basically leaves you with an unsecured and uninsured investment. The investment becomes worth less than the paper it is written on. Always know who you are dealing with, and never make an investment that you can't control. 

Conclusion

If you are considering investing in gold for the short-term, or buying gold to hold on to for the long-term, make sure you know exactly who you are doing business with. It is easy to find information on a company online, and just as easy for crooks to take your hard-earned money. As with any investment, you should do your homework and be informed, for knowledge is power. Dealing with a reputable dealer will save you in more ways than one.

Article Source: http://www.streetarticles.com/investing/protect-yourself-when-buying-gold

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