The Role of a Gold Dealer in Secure Precious Metal Transactions
When people look to invest in precious metals, they often turn to a gold dealer. Whether a buyer is interested in purchasing bullion coins or bars, these middle-market distributors play a vital role in the market. But what does a gold dealer actually do, and how should a buyer determine if the dealer is trustworthy?
When purchasing physical precious metals, it is important to be aware of the pricing structure. Precious metal dealers and brokers often charge a small markup on the price of bullion products. This is a necessary part of the retail industry to cover overhead costs, ensuring that customers receive competitive pricing. This practice also provides for a more transparent pricing process, helping consumers make well-informed decisions about the products they purchase.
While some dealers do operate as precious metals buying and selling company, coin shops, or pawnshops that directly sell to consumers, these entities do not qualify as true dealers in any sense of the word. In order to gain this title, these businesses are required to act as intermediaries in a two-way market by buying and selling bullion products. Since they are active participants in the marketplace, they must adjust their prices to reflect the ebb and flow of supply and demand.
As a result, there are some unscrupulous dealers that engage in fraudulent practices to lure buyers. For instance, one of the leading sellers of bullion coins is a company called Safeguard Metals, which was accused by the SEC and CFTC of defrauding elderly investors out of over $67 million in a fraudulent markup scheme. The company found its leads by advertising on conservative political radio shows hosted by Sean Hannity and Mark Levin. In a similar vein, another dealer in the Los Angeles area, Fisher Capital, advertised on Trump-era Fox News anchor Tomi Lahren’s show.
These unscrupulous dealers rely on investor fear and doubt to inflate the price of their bullion products. Some even encourage their customers to hold their metals outside the financial system by claiming that their purchases are “non-reportable.” Regardless, no investor should be misled into accepting overpriced bullion from a dealer.
Gold buying and selling is often an attractive option for people looking to diversify their portfolios, protect against inflation, or add liquidity. Moreover, some people are concerned about the integrity of government and finance institutions and therefore prefer to hold bullion in their homes or bank safes rather than trusting the stock or bond markets.
While many people buy gold and silver as a form of wealth preservation, others use it to increase their retirement savings or boost their college funds. In either case, it is vital to know the different players involved in the bullion industry and their roles in a successful investment experience. With the right research, a prospective precious metal buyer can find a Pittsburgh gold dealer that meets their needs and helps them reach their investing goals.
