Gold prices continue to hover above $1,700 an ounce, so many investors are looking to gold dealers or brokers as a way to tap into this lucrative asset. Gold continues to serve as a safe haven for many investors, so it may seem as if you can’t go wrong. However, scammers are quick to take advantage of unsuspecting investors, so it’s important to look for a reputable gold dealer if you decide to buy the yellow metal.
Beware of gold scams
Whenever you buy gold, there is one element of the purchase that makes it a bit more complicated than other asset purchases. Any gold or other precious metals you buy must be stored, and many gold dealers will also store it for you. However, if you aren't careful about which dealers you do business with, you could get taken by any one of a number of common gold scams.
For example, someone who claims to be a gold dealer who also stores gold could claim to sell you bars, but the gold they supposedly sold you may not even exist. Others may claim to sell gold on platforms like eBay, but it may not be real gold. If the price is nowhere near $1,700 an ounce right now, it isn't real gold because as the saying goes, if it sounds too good to be true, it probably is.
The most common gold scam is selling bars or coins that are only coated in gold rather than being pure gold.
Buying and selling gold
When buying gold, there are several factors to consider. For example, gold comes in various quality levels. The standard quality of fineness is .999. Pure gold is too soft, so producers ad a tiny amount of other metal to keep its shape in a bar or coin.
Buying and selling gold typically comes with transaction fees, so they are important to factor in. Any delays in buying or selling are also not a good thing because the price can change quite rapidly. If you decide to sell your gold, you can usually sell it back to the dealer you bought it from, but they usually will not pay whatever the spot price is.
Shipping is another factor when it comes to buying gold. The yellow metal is extremely heavy, so shipping it can be very expensive.
You will also need to store it. You can choose to store it at home if you have a safe, but you should take out additional insurance for it in case it is stolen. If you buy a large amount of gold, you may want to pay your dealer to store it for you. The price of storage will depend on how much you own. Reputable gold dealers will often issue storage certificates to show which specific bars of gold are yours. The bars are then numbered to ensure that your gold is truly yours.
These are some reputable gold dealers and brokers
Gold dealers differ from brokers in that brokers simply broker sales by bringing two parties together. There are reputable companies in both forms of gold sales. Two of the most reputable gold dealers are JM Bullion and APMEX.
JM Billion charges a $75 annual fee if you invest less than $100,000 and $125 if you invest more than $100,000. The company also charges a $50 setup fee and requires a $100 minimum investment. JM Bullion prefers that you store with A-M Global Logistics, although you can store with other companies.
APMEX is the largest precious metals dealer in the U.S. The company sells bars, rounds and coins in a variety of sizes and offers free shipping on orders over $99.
According to Consumer Affairs, other reputable gold dealers include Lear Capital, Patriot Gold, Orion Metal Exchange, Advantage Gold, Noble Gold Investments, American Hartford Gold Group, Birch Gold Group, Red Rock Secured and Goldco.
Reputable gold brokers include FOREX.com, Interactive Brokers, E*Trade and TradeStation.
To learn more about any gold dealer or broker, including their registration status, background and history, you can call the Commodity Futures Trading Commission at 866-366-2382 or contact the National Futures Association.