Alert: Read this Before Buying Gold or Silver
(Fallbrook, California) - Investors who want to purchase or sell gold or silver coins should avoid “impulse buying” and “uninformed selling,” according to the Professional Numismatists Guild (PNG), a nonprofit organization composed of the country’s top rare coin and bullion coin dealers.
The experts warn investors to be wary of cold-call solicitations because the telemarketer’s fees may be significantly higher than other sources for precious metals coins.
“As bullion prices significantly increased in recent months, PNG-member coin dealers across the country have seen a new ‘Gold Rush’ with a sharp increase in the number of people who want to buy or sell precious metals coins, such as the American Eagle and Canadian Maple Leaf. To make the best possible transactions, people need to know the current ‘spot’ price of precious metals, the dealer’s reputation and the fees or commissions before they buy or sell,” said PNG President Gary Adkins of Edina, Minnesota.
“Uninformed, impulse buying or selling often results in people overpaying when they purchase, or not getting the most money possible when they sell. The average retail commission for one-ounce American Eagle or Maple Leaf gold coins is about five or six percent. Some high-pressure tactic telemarketers are charging ten percent or more, and also may be tacking on financing or storage fees,” said Adkins.
The PNG offers these three tips to avoid risking money:
First, know what you want to buy or what you have to sell, and what the intrinsic (“melt”) value might be. Volatile prices can quickly change, but reliable information about the “spot market” for gold and silver is available online. Many PNG member-dealers post current prices on their websites and are happy to provide information if you contact them.
Second, know your dealer. Is he or she fair and honest? What are the total commissions or fees for your transaction? Generally, the best advice is to take delivery of items you purchase and request a delivery date from your dealer. Remember, you’ll pay a higher percentage over “melt” value for fractional pieces (one-tenth, one-quarter and one-half ounce) than for full, one-ounce gold bullion coins. Market volatility also can affect the margin (“spread”) - that’s the difference between what a dealer will charge to sell you the item and what he will pay to purchase it.
Finally, be aware of possible state or federal tax implications, the Patriot Act or local laws regarding cash transactions. You’ll need photo identification, and depending on the type of transaction you may receive an I.R.S. 10-99 cash reporting form.
Helpful consumer education tips and an online directory of PNG member-dealers are available at www.PNGdealers.com. PNG members must adhere to a strict Code of Ethics in the buying and selling of numismatic merchandise, such as bullion coins.
For a copy of the informative pamphlet, “What You Should Know Before You Buy Rare Coins,” and a printed directory of PNG member-dealers, send $1 to cover postage costs to: Robert Brueggeman, PNG Executive Director, 3950 Concordia Lane, Fallbrook, California 92028. Phone: (760) 728-1300. E-mail: info@PNGdealers.com.