7 Dangers of Buying Cheap Gold Coins

Cheap Gold Coins

With gold being on the top of everyone’s hot list to invest into, one of the greatest risks any inexperienced gold investor is facing is buying cheap gold coins. While it’s a great idea to shop around in hopes of finding the lowest priced gold bullion coins, when the prices are lower than the spot price of gold, chances are you are looking at a fake. An authentic and high quality bullion coins simply cannot be priced lower than their market value. It is not realistic at this point unless there’s a catch or a trap for gold investors and collectors. However, with the stock market uncertainty many investors are trying to quickly recover their losses and reinvest in alternative areas like precious metals market. Unfortunately, high investor interest in gold bullion coins creates a perfect environment for various gold and silver coin scams.

Below we present top 7 dangers of buying cheap gold coins that might be waiting for you.

1. Fake gold coins. The number one risk of buying “discounted gold coins” is that you will be acquiring a fake or at best a gold plated coin that may look like the real gold bullion. If your cheap gold coins deal sounds too good to be true, it probably is. It’s very unlikely that with the high spot price of gold any Mint or bullion dealer will sell you authentic gold coins with a significant discount. The most obvious danger you might be facing is acquiring a well manufactured fake. Especially beware of coin vendors located in China who are notorious for producing a variety of fake gold and silver coins.

2. False promise and Misinformation. Those customers who buy their gold coins investment through TV infomercials are running the risk of acquiring the wrong type of coins. Many infomercials misguide their viewers into believing that popular gold bullion coins are not the way to go and one should turn in the direction of “rare coins” with extensive historical background. TV ads strongly insist that bullion coins like American Gold Eagle or Canadian Maple Leaf can be confiscated by the government once again in the future like it happened in 1933 and only buying numismatic coins will safeguard the investment. Getting educated on the basics of physical gold investment will allow buyers to make educated decisions.

3. eBay Gold Coins. While eBay is a very safe market place supported by the honest and reliable feedback scoring system, there’s always room for cheap gold coins scams even here. One of the dangers of buying gold coins on eBay is dealing with sellers who have limited to no buyers’ feedback. Such vendors are there to make a quick sale and disappear from the market with your money. Sometimes the vendors mean no harm; however, they can still misrepresent the coin’s actual value and its grade. Some dishonest sellers may photograph an authentic coin but deliver a fake one instead. The only way to safeguard against eBay scammers is buying exclusively from sellers with extensive positive feedback.

4. Undelivered goods. This is another very probably danger of buying cheap gold coins that the vendors are simply not going to deliver your order. If your gold is cheap, there’s definitely a reason for that. What is the solution if you are afraid this may happen to you? Researching a coin company or an online coin dealer through Better Business Bureau is one of the ways to insure a pleasant transaction.

5. Impossible to Resell. Certain cheap gold coins might be hard to sell once you decide to liquidate you gold investment portfolio or coin collection. Beware of buying some cheap gold coins because there’s almost always a catch that comes with a low price tag. In addition to wasted money you may be facing legal consequences of buying cheap gold coins from questionable sources or pawn shops in case these gold coins had been previously stolen. This could be easily prevented by acquiring your gold investment only from reputable and well known coin dealers.

6. Buying coins in altered state. Some novice coin collectors try to foolishly perfect the grade of their coins by polishing them or altering them in any shape or form by adding holographic stickers, adding stampings or marks for various reasons. Having realized that they have virtually damaged the coin, they quickly try to sell them off much cheaper than their real value.

7. Poor grade. If you are just starting out in numismatics, it might be hard for you to know the real value of gold or silver coins and you might think you are getting a good deal on certain coins, however, you might still be overpaying for damaged or simply worthless coins in poor grade that should not be worth more than their scrap gold value. Buying only from well known dealers online will insure you will not run into the same problem again.