As the price of gold goes higher and higher in value, investors must be aware that counterfeit coins will appear in the marketplace.  This also took place back in the 1970’s esp. with numismatic coins which carry a premium.

To avoid being stuck with bogus bullion coins simply place the coin on the tip of your index finger and tap it gently with another object.  Then place the coin up to your ear.  You will hear it “ringing” like you would if you tapped the side of crytal.  As far as numismatics, the only real way to insure against the coin being a counterfeit coin is to have it graded professional by an independent and recognized coin lab.  A counterfeit numismatic coin can be composed of real gold without additional base metals and they also will “ring true”.  Those who counterfeit numismatic gold coins are doing so in order to take advantage of the premium.

Additional advice:

  • Never place your gold in a bank safety deposit box … find a place at home.
  • Never leave your gold with the party from which you purchased your gold … take delivery.
  • Never discuss your physical ownership of gold with anyone outside of your immediate family, and even then, be sure whoever you tell can be totally trusted.
  • Whenever possible, purchase your gold face-to-face using multiple sources and paying only in cash.  Local auctions are a good way to do this.
  • If you do plan to buy from a source you may not be familiar with, ask if they are willing to perform the transaction as a bank sight draft.  Doing this provides one with an additional level of confidence.  The process is as follows:  Place funds in an account at a bank where you have already confirmed that they would be willing to accept the bank draft.  Place the trade and receive a confirmation number.  You will have to provide the shipping address of the bank along with a phone number for the President or VP of the bank to confirm they will follow through on the sight draft.  The company from whom you are buying will verify this information and the fact that your funds have been set aside.  Once these particulars are out of the way, they will ship the gold to your bank, you will be notified to come to the bank to verify, once you accept the shipment, the banker will then release the funds - usually by wire - to the company.  There will be a paper trail in this case, but you will at least be insured that you receive your gold BEFORE you release your funds.