Why can’t I buy gold and silver bullion coins at the spot price?

The Internet is full of loosely-regulated advertisements that are meant to catch our eyes, and since the average attention span is now shorter than ever marketing experts have been forced to devise new ways to persuade us to call their salesmen. One such ad claims that investors who use a particular firm can buy gold and silver bullion coins at spot price. This seems like an incredibly attractive offer, but is it real? After all, anything that seems too good to be true probably is too good to be true, right?

A little online research turns up a few companies that have advertised gold at the spot price. One of these firms, Certified Gold Exchange, recently commented on their “buy gold at spot” promotion.

“We plan a ‘buy gold at spot price’ promotion every fall,” said CGE spokesman Gary Hearth. “A lot of investors are brand new to gold and offering bullion at spot price is a great way to get them off the sidelines and into the market. Once they see how a transaction works with us they usually buy more metals and these clients tend to provide us with the most referrals, too.”

The Better Business Bureau has identified several gold and silver bullion companies that use bait-and-switch tactics in their advertising and investors are encouraged to investigate any potential partner at www.BBB.org. Hearth says that while CGE has an A+ reputation with the BBB, clients of other firms call every day with bait-and-switch horror stories. Unfortunately, some investors have been duped into far worse than falling for a sleazy sales tactic.

A recent issue of Real Money Magazine discussed one investor who purchased almost $300,000 of gold bullion, and the company offered to let her buy gold below spot price. The investor received the metal and stored it in her home safe. Some years later the woman died and her will instructed that the gold be given to various family members. When the executor tried to contact the company he found that they were no longer in business. Another company agreed to buy the gold but when it arrived at the depository it was determined to be fake. The woman had spent over a quarter of a million dollars on gold-plated tungsten and had left it to her family. If the gold had been real, it would have meant $970,000 for the family; in comparison, the tungsten was worthless.

Investors who need help finding a local retailer or a national discounter of gold should contact GoldSilver.org for our free Gold and Silver Investing Guide, and we are available from 10am-7pm Monday through Friday at 1-800-394-3337 to answer your questions about gold and silver investing.

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