Gold dealers provide a variety of services to the bullion investing community. Besides providing access to physical precious metals through bars and coins they can also help people set up gold IRAs for retirement or assist with trading on the commodities market via futures contracts. Many savvy investors use both methods to build their portfolios. While buying from a trusted local pawnshop or jewelry store remains popular for those who want to hold physical precious metals in their hands there’s now a whole world of online gold investing to explore.
One of the best things about gold is that you can buy and sell it at anytime without worrying about getting ripped off by a shady dealer. However with the price of gold at record highs many crooks are trying to cash in on the trend.
The good news is that if you do your research and follow a few simple guidelines you should be able to find an honest and reliable gold dealer who will pay you what your metal is worth. Just be on the lookout for these common red flags when dealing with a gold dealer:
They Pressure You to Sell
A reputable gold buyer will never try to rush you into selling your metals, especially in this volatile market. Run, don’t walk, away from any dealer who tries to convince you to sell now because prices are going to drop again tomorrow.
They’re Untransparent
A gold dealer should always be transparent when it comes to his pricing. He should clearly outline the specifics of what he’s offering including weight, purity and any premiums that may apply. Opaque offers are a red flag and should be avoided at all costs.
They Use a Lot of Jargon
If you hear a dealer using words like “price discovery” or “reportable” that’s another red flag. These terms are used to confuse the public about how bullion products are priced and sold. The truth is that very few if any bullion products are reportable to the IRS when they’re sold in certain quantities. Even the popular 1 ounce Krugerrand and Maple Leaf coins are only reported to Uncle Sam when you sell 25 or more in a calendar year.
The rest of the bullion market is virtually tax free with the notable exceptions being platinum and palladium bullion coins and bars which are only reportable when sold in quantities of 25 ounces or more. Other than that most all other bullion products are tax free when they’re sold to a trusted dealer. This is why so much of the early gold movement included ideas about outside of bank storage of precious metals.
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