Beware Bullion Companies That Sell Gold and Silver

Global Consumers paying Too Much For Gold Bullion and/or not having access to purchase it  at all

Are Gold and Silver bars and coins really a good investment? Well, yes providing you buy them right. Silver bars and coins are not such a good investment due to VAT being charged...

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Consumers don’t just sell high value precious metal items, they also buy them, not only in the form of jewellery to wear but in precious metals bars & coins to invest in. The bullion market for gold coins and bars alone is worth many billions of dollars worldwide (no actual estimate available)

There is a very high demand all over the world to buy gold silver and platinum i.e. bullion. You can go to a wide variety of bullion dealers and buy physical gold or “storage” gold in a vault at a percentage over spot i.e. around 5-10% from a reputable dealer for a 100gram bar BUT this margin increases dramatically if you buy very small bars or coins e.g. 1 gram, 5 gram and 10 gram bars and the small purchaser can pay anything up to 75% over the spot price. This means they get penalized.  A quick check of this issue by examining various bullion dealers pricing structures will confirm this problem. In their defence it could be argued that efficiencies of scale come into play BUT nowhere near to the extent of a 70% + price hike

A bigger issue however is that many millions of dollars are invested in gold bars and bullion at far above the rate that could and should be paid due to lack of education and knowledge in the gold investment market. Over-charging by reputable-looking companies is a trap to snare unwary first time gold buyers. Mail-shots, websites and radio advertisements are now selling gold to US & UK purchasers at 15-40% above the true "spot market" value, aided by reports of a gold-coin shortage. Overpricing is also very common on auction sites. These dealers need to offset selling fees while still making enough of a profit to justify their business. As a result, the customer will not find any precious metals for spot price on eBay. If the customer does its only because some dealers try to lure in members with low priced bullion, only to charge extortionate shipping fees. This is a problem worldwide and not just on the Internet. Consider that standard bullion coins such as maples, eagles, Krugerrands and sovereigns are being offered for sale, in pawnbroking and jewellers shops and also online at up to twice the bullion price. The purchaser that stands the greatest chance of losing money is the smallest of purchasers.

Even the Coin Mints offer for sale gold & silver coins, often special edition coins, that are poor investments. These can cost two to three times the value of the actual gold and represent a poor investment as the Daily Telegraph reported in the UK

“The "2015 Royal Birth Celebration Sovereign Struck on Day" coin, priced at £500, contains 7.988g of 22 carat gold. At today's price of £784 per ounce (£25.21 per gram) that would put the value of the gold in the coin at £184.66. That calculation includes reducing the value of the gold by just under 10pc to account for the fact that it is 22 carat, and not the purer 24 carat, metal. In other words the gold value of the coin is 37pc of its price. …” Source Daily Telegraph

Also many consumers throughout the world who have no access to an online or physical bullion vault. The reasons for this can be

·         Insufficient funds to meet minimum purchase requirements

·         Insufficient funds to make it worthwhile purchasing due to storage/commission costs

·         Inability to meet rigorous ID requirements

This forces customers to try and buy bullion from other sources e.g.  jewellers and pawnbrokers where they pay a heavy premium.

Fake Gold bars, coins & Scams

The problem with fake gold bars and coins is a huge world-wide issue with millions every year being lost to either the purchase of fake gold bars and coins or in one of the many fake gold buying schemes that pervade the Internet. 

There are many other types of gold scams at the moment for example

Up Front Fees

A common fraud is to ask for a large up-front fee i.e. for shipping or for customs clearance or even to personally deliver the gold.  Any gold received if at all is worth far less than the up-front amount paid.

Proofs

A lot of the larger deals will ask the buyer to send proofs, to prove ability to complete on the deal. This is normally names of buyers, proof of funds, passport copies etc. These proofs are then used to run scams in the buyer’s name, especially passports with proof of funds and other legal documents these can be used for blackmail or scams & no gold will be received,

The Flip

More detailed scams will have enough proof within them to get past the preliminary checks but will ask for a buyer to create a payment / financial instrument. Some form of bank MT103, SBLC, BG or escrowed funds. These funds are not to be paid out until completion of the deal, giving the buyer security. Unfortunately, these can be monetised or used as proof of funds to then go out and purchase Gold to sell the buyer. A rapidly growing scam. This can even be done with an MT799 which is only a swift message of proof of funds between banks but can be used to flip a deal once the scammer has proof of a willing buyer with funds.

The inheritance scam

This seems to be becoming more popular. Example: My father, my uncle died and left me 40 kilos and I just need so many dollars to release it. These are often backed up by equally corrupt lawyers or advocates in Africa. A variation on this theme is the girlfriend or boyfriend befriending the customer and then promising to come visit / marry and just needs a few thousand dollars to release gold to sell to cover their trip. Then a bit more and a bit more, etc.

Fake Gold Scams: Overpricing

One of the most common fake gold scams is committed by high-street dealers looking to take advantage of customer naivety. They rely on the fact that the customer may not have access to up to the minute market information, that the customer may not understand spot price or the value of a particular metal. This is especially true with numismatics, when new purchasers may not have a firm grasp of the market and are more likely to be taken in by exaggerations on behalf of the dealer.

To convince the customer to pay these prices they may also tell them that there is a gold shortage. This is common during times of economic distress, when the demand does increase, but never enough to cause an actual “shortage”.

A good website for information on this issue is schiffgold.com

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We estimate over $1 billion is lost to purchasers this way, with the aforementioned detrimental effects to personal well-being and spending power. 

Sell Gold To The Right Buyer (Link In The Chain)

Global Consumers Sell their Gold too cheaply

90% of the recycled supply of gold comes from the consumer (not industrial scrap) i.e. when the consumer sells their jewellery/scrap. We have proof that from this $50 billion industry the consumer, through overlong supply chains filled with many rogue middlemen, gets short-changed to the tune of some $33 billion taking money from the pockets of those who need it and away from the local economy, having an impact on local revenue and employment

It is very apparent to those who operate in the high-value supply chain for precious metals that the said chain is simply too long. Middle-men buy gold and precious metals from consumers and jewellery makers and sell on to more middle-men who then sell on to yet more, each taking a profit from the transaction. As a result of this inefficient chain, the original recycler i.e. the consumer accepts, or is forced to accept, a poor price for their precious metals whilst the whole recycling process is slowed down and becomes inefficient.

Consumers around the world through lack of knowledge in the murky world of the precious metals recycling e.g. for gold and silver lose billions of dollars a year. 

Inexorably linked to the problem outlined above, every year, globally, millions of £/USD are scammed from consumers selling their precious metals. Market forces and even the accessibility of information regarding the trading (or spot) price of gold etc. have failed to deter the unscrupulous trader from buying gold, silver and platinum precious metals from the consumer at far below market price It’s not just consumers that are affected by this. Even the middlemen who buy from the consumer and sell on to other middlemen often receive prices far below spot price and it all gives the Industry a bad name

Examples of middlemen include jewelers, pawnbrokers, cash for gold pop-up shops, canvassers postal gold company’s, antique dealers, etc. and we have heard regularly of prices as low as 30% of the spot market price for gold, being offered to the consumer. For comparison the National gold-recycling/processing  companies out there for example Birmingham Gold Company or Hatton Garden Metals (tho they seem to retail the scrap gold they have bought) amongst several genuine businesses in the industry pay 94-6% of the spot price i.e. market price. So the thing to do is to cut out the middlemen.

This is an unacceptable situation. Consumers may have an urgent need for funds or may even be in financial straits. Of course, while market forces and the Internet mean that consumers should be able to shop around for better prices when they come to sell their gold or silver, often the choice in their local area is so limited that 30-50% of the spot or market price for gold is all they can realize.

To make matters worse within this corrupt chain there are rogues and cheats that will under-weigh gold items thus affecting value, or even undervalue the asset’s purity

This unfair system not only means consumers get less for their gold, they have less to spend and put back into their local economies. This can make a major difference to the success or otherwise certainly of a small local economy as gold and silver and platinum are basically as good as money. Shortly we will reveal that $billions of USD are lost in this way

More importantly many people only sell their valuables as a last resort and it is unethical and immoral to pay a pittance or a low percentage of the spot market value of their precious metals It happens even in countries like the USA and the difference in prices offered is striking (see fig 7 below)

NB It is important to note that some of the evidence below i.e. found in the public domain dates back over the past five years and there has been a marked decline in consumers posting their poor gold selling experiences online BUT to conclude that this means a fairer system would be incorrect. The slight decline in gold prices from the recent high in 2012 has simply meant that poor selling experiences are no longer newsworthy and have simply become the norm. Added to this the fact that there is little policing or regulation of gold-buying.  Complainants have realized over the past few years that there is little they can do to recover undersold assets. Whilst few people bother to complain online about these scams anymore that does not mean to say they no longer happen. They do… Gold scams are as old as the hills.

Never Sell Gold to a Gold Buyer that Doesn't Publish Transparent Prices

You want to get the best price when you sell Gold or silver, right? In that case always avoid any gold buying company that doesn't produce a gold price per gram, on their website. The above gold  and silver calculator belongs to The Birmingham Gold Company but there are other gold and silver buying companies out there who also offer a transparent gold price on their website

What we like about the above calculator is that it states very clearly on their website that the price shown on the calculator is the price actually that they pay. Some other companies offer an "up to" or "guide" price on their gold and silver calculators. That is not acceptable . It's just too vague. If you see a calculator that says "up to" or "guide price" then avoid using that company.

Beware of Fake Gold Comparison Websites

When you want to sell Gold or Silver your main aim is to get the best price. If you look at the chart below the first thing that will strike you is the huge discrepancy in the prices offered but what may surprise you more is that this comparison site is rigged. None of the gold buying companies mentioned below offer anywhere near what the best paying companies offer for the same amount of gold

Our research has shown that the highest paying gold-buying companies out there pay  almost double what the leading company on the above list pays anyway and where does it disclose how much gold was actually sold anyway.?

Not sure if we are giving you the correct information about misleading gold comparison websites then listen to the BBC 4's consumer affairs programme   You & Yours on the mistake  of using  gold comparison websites to sell gold and while you are doing your homework check the top listed compoany on this gold  scam comparison more closely 

http://www.bbc.co.uk/programmes/p018z54f

Why You Shouldn't Sell Your Scrap Gold to Your Local Jeweller or Antique Dealer

Be careful where you sell your Gold in the UK

Getting the right price when you sell Gold, Silver or any type of Precious Metals is imperative. However it must be remembered that most local jewellers and antique dealers often offer below scrap gold and silver prices for a specific reason.

They will try and sell your Gold and Silver as items, but if they fail to do so, by buying them at less than scrap price from a member of the public they are still able to turn a profit by scrapping them in  with a recognized Gold Processor 

There are several Gold and Precious Metals Processors in the UK who not only buy direct from the General Public, but also from antiques dealers , local jewellers and the trade generally . Companies such as the Birmingham Gold Company in Birmingham and Hatton Garden Metals in London turn scrap gold into bars for recycling purposes.

the point is that as a mamber of thre Public you can receive a lot more for your Gold, Silver and precious metals if you cut out the middlemen, ie local jewellers and antique dealers and sell direct to the processors

As the Birmingham Gold Company make it clear

 "Simply, when you sell gold, silver & platinum  to us,  you cut out the middleman ie your local jeweller / gold buyer who buys it from you & then sells it to gold companies like us. In the process they  often earn up to £4 a gram by just passing it on. If you have 100 grams or more of 9 carat  then you have lost up to £400 by simply not  coming to see us!  It could be double that for 18 carat."

Next time you consider selling your gold or silver to a local jeweller, gold dealer or antique dealer think again