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gold - All posts tagged gold

  • Aug 18, 2011
    11:23 AM ET

    Fool’s Gold: Beware of ‘Rare’ Coins


    As reported yesterday, many investors are buying gold, while others are moving back into equities. Given the popularity of the precious metal, some experts are warning consumers about unscrupulous retailers selling jewelry and vintage coins. The Maine Office of Securities recently cautioned consumers about scam artists. David Schraeder, spokesman for the World Gold Council in New York, says you can buy from the U.S. Mint, though you may pay a slight premium, and says the council’s site has a list of respected dealers.

    Peter Schiff, CEO of brokerage firm Euro Pacific Capital in New York, who prefers to buy gold for his clients rather than equities, has just released a report, “Classic Gold Scams – & How to Avoid Getting Ripped Off.” It says more companies have sprung up in recent months offering ways to invest. The lesson: Don’t get carried away with the gold rush or aggressive salesmanship without knowing your French Rooster from your American Eagle.

    Here are the Top 5 tips:

    The Bait & Switch

    Some companies may advertise gold bullion, but then switch the telephone sales pitch to coins, the report says. Not all gold coins have an “antique” value. “Just like buying an Armani suit is not an investment in wool,” Schiff says, “rare coins are not an investment in gold.” Schiff says rare coins can be hard to liquidate – unlike, say, bullion – and says buyers should not be bamboozled by charts showing how rare coins exceed bullion in value over time. Some do, but that does not apply to all vintage coins.

    Don’t Buy A Turkey

    The French Rooster, Swiss Helvetia and British Sovereign are not exactly rare, despite what some naïve consumers may believe. The American Gold Eagle and Canadian Gold Maple Leaf are among common gold bullions that that Schiff says are worth buying. The South African Krugerrand – the original “bullion” gold coin, launched in 1969 – now has 54 million units in circulation worldwide. Genuine rare coins rely on services like the American Coin Club Grading Service or Professional Coin Grading Service for validation.

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