“[Investors] are being told that these coins, of course because of their low mintages, are going to be worth some significant amount of money down the road…”– Steve Rand
Unfortunately, the precious metals market is no stranger to distrustful coin dealers due to the sheer volume of investments being made in gold and silver. Recently, there’s been an uptick in reports of a specific type of coin scheme involving exclusive coins.
Watch the video above to hear what Sr. Advisors Damian White & Steve Rand have to say about the issue and how investors can protect their investments.
The “exclusive” coin scheme.
One of the most prevalent sales tactics in the coin market right now is the selling of “exclusive” coins that are mostly minted in foreign countries. Sellers fabricate an air of rarity around these bullion coins to trick potential buyers into thinking the bullion coins are more valuable than in reality. For example, we’ve heard of investors getting tricked into overspending on the Canadian Wildlife Bullion Coin Series.
The fact that the coin is minted from a foreign country, and is typically made for one coin dealer, adds to the myth of exclusivity while making it harder for buyers to call the bluff. This scheme is most commonly aimed at investors who are purchasing coins for their precious metals IRA although anyone purchasing coins can fall victim to the scheme.
There’s nothing wrong with Government or Private Mints choosing to stamp unique coins for any dealer. It’s the coin dealers themselves making the decision to mislead their customers.
Keep an eye out for these red flags 🚩.
Odd Coin Weights
A telltale sign of the “exclusive” coins scheme is odd weights. It’s not uncommon to see investors getting swindled with ⅓ oz and 1.25 oz gold coins. Sellers take advantage of the confusing weights to make it harder for investors to calculate a fair value based on the spot price of gold.
Seasoned bullion coin investors are used to paying slightly over the spot price of gold since sellers need to charge premiums. However, if you’re seeing exclusive coins for prices well above the current price of gold (we’ve seen premiums double the price of gold!), you might want to reconsider the offer. Exorbitant costs are a key tactic for these schemes.
Rarity can add significantly to the value of a coin. This exclusivity can derive from the low mintage numbers or the sheer age of the coin. Regardless, too much discussion and stress on the exclusivity of the gold and silver coin should tip investors off that something’s not right.
It’s crucial to have comparisons when investing in gold and silver coins. You should be able to find a similar coin to gauge the potential performance of your purchase. The issue with these “exclusive” coins is that deceitful coin sellers rely on their not being a reliable comparison which makes it harder for buyers to identify a reasonable price.
👉 Continue learning: Uncover additional red flags by reading Buyer Beware: The Truth About Dealer Exclusive Coins.
Invest in gold and silver coins with a track record.
When making an investment in gold or silver coins, it’s imperative to ensure the product has a track record of performance. Reputable coin dealers will be able to provide proof of a coin’s previous success so you can feel confident the investment will perform similar or even better in the future under similar circumstances.