Last Updated on August 16, 2022 by Vasco Lourenço
This article aims to alert everyone to the big gold IRA lies you may encounter if you hope to invest in gold and silver for your retirement.
When you are considering a gold and silver purchase for your retirement savings, naturally, you want to talk to a few companies, learn more and decide who you want to do business with.
The gold IRA sellers truly desire your business. And you might hear some very enticing offers to win you over. But how do you know if what you’re hearing is true?
It’s gotten so crazy that some gold IRA dealers offer huge amounts of free silver to influence you to buy from them instead of another company. However, in reality, that’s not a cost-benefit for you. You may actually pay for that free silver because those dealers factored into the price of what you’re buying. So, it’s not a special deal.
If a company offers you huge amounts of free silver, be careful.
When people are shopping for gold IRA companies, they may hear some pretty outrageous lies being told to the public.
Gold IRA companies are unregulated and are not all alike. Some use lies, gimmicks, and high-pressure tactics like the excessive “free silver” scheme to push you into starting a gold IRA with them.
With one wrong decision, you could be facing large hidden charges that reduce the value of your funds for years.
If you want to avoid a costly mistake and learn how to avoid falling for those gold IRA scams, keep on reading.
Before we continue, here is a free gold IRA guide that you might find useful if you’re interested in learning more about gold investment. This is the exact same information that was utilized by Joe Montana, a former quarterback for the American football team, to invest in gold.
Prefer to watch a video rather than read this article? Watch the video version.
Storytelling in itself isn’t a lie. We call it a lie and start with it because, usually, a story leads to the lie that there is an exceptional opportunity for you to get gold at a great price.
The story gives the dealer an excuse to tell the lie.
- They may tell you someone died or is getting divorced.
- They can make a huge institutional trade.
- They may have a surplus.
Or any number of other excuses that lead to the lie of the exceptional opportunity for gold at a crazy good price you should not miss.
Once you start hearing the story, get ready for the lie.
The truth is gold and silver prices are very straightforward. For the most part, circumstances don’t change the price.
Can you imagine your equities broker telling you that you have a unique opportunity to buy a discount Apple stock because they happen to be placing a huge trade or someone died or is getting divorced? Probably not.
As a buyer of gold and silver, and to understand why stories like this are a setup, you have to understand more about gold and silver prices themselves.
The spot price of gold and silver is the futures contract price: it’s the price at which mints and institutions buy raw ore from the mines. In general, no one can pay spot but those institutions. Not you, not me, and not the gold IRA dealers.
National gold and silver dealers do millions of dollars in transactions daily and weekly throughout the year. So their volume already has them paying the lowest buying price. And all the big dealers are paying close to the same price.
So, for the most part, no big discount is possible. No story could set up a better price opportunity for dealers than the ones that are already getting. So how can they offer you a so-called big discount?
Let’s say, for some strange reason, a gold IRA dealer purchases gold and silver and gets “stuck with it” because of a cancellation due to some extraordinary circumstance, such as a death.
The dealer tells you they need to get it sold off, so they are willing to sell it to you at a discount. They say it’s a great opportunity for you.
Now, why would a company doing millions of dollars in business daily or weekly be holding on to inventory from a canceled order waiting for you to decide? Besides, the IRA transfer may possibly take weeks.
You have to ask yourself, why isn’t it immediately being used to fill the next order?
This leads to our next gold IRA lie: inventory.
For the most part, gold IRA dealers do not sell from inventory. If any dealer gives you an excuse involving inventory, it’s probably not true.
If you hear this, run the other way.
The salesperson you are speaking to is probably in a room with other salespeople. And there’s almost certainly no vault they are checking.
Vaults aren’t kept on salesforce. And there is no valid “special deal” 10 minutes later on something they found.
The price at which a commodity may be bought, sold, or delivered at this same moment (right now) is known as the spot price.
Different coins have different prices over spot, not one universal price. But some companies may tell you all of their coins are one price over spot.
They may be trying to make you think you don’t have to investigate actual coin prices. But for the specific coins and bars you are looking at, you should always ask how much the price is over spot, so you have the correct information.
You might hear a precious metals dealer say there’s an institutional or large trade happening coincidentally at the time you want to buy. Or they might say it’s scheduled for sometime soon, and it’s a better price opportunity for you if you piggyback your purchase on it.
This is again likely not true because reputable national dealers are already doing the volume of business that gives them the lowest possible price.
Is your gold IRA dealer saying it can guarantee the market for more than a short time, such as past one week? They may claim that if the market goes down, it will guarantee your investment and cover your shortfall.
But it’s likely not true. Even offering such a program is outrageous.
By making such an offer, the gold IRA dealer is guaranteeing you profits. Don’t believe this, as there are no guaranteed profits.
Now, let’s talk about a lie you’ve probably heard of in other industries too.
In this situation, the gold IRA company lists gold and silver assets on their website, or it quotes you a price on items they only have a few of at a below market price.
This draws you in. However, they have no intention of selling you that item. They might not even have access to it at that price in bulk.
Instead, they switch the conversation to another product. This is called the “bait and switch” because they bait you with one product at a low price they do not intend to or cannot deliver.
They use that bait to start the conversation so they can sell you into something else.
This can sometimes work if you make the mistake of thinking the original item is so cheap that they must have great prices on everything.
We’ve all heard a salesperson say:
- This special is ending soon, so buy now to take advantage of this opportunity!
Have you ever wondered why the special always ends soon after you call? They only say this because it’s a way to get you to act without thinking.
You should never work with a gold IRA company that is trying to force you to act quickly without taking your time to think.
Beware of any specials “ending soon.”
This can be a lie, and it can be a trap.
When you’re ready to buy your gold, the dealer says it will offer you a lower spread on the “ask” than other companies.
- “Ask” is your buying price.
- “Bid” is the price you eventually sell it for.
- “Spread” is the difference between the two.
Offering a lower spread on the “ask” could be a lie. As you can see with a Google search on American Eagles or other common gold products, price norms are very close to each other. A dealer can’t lower the price much.
The tactic is also a trap because when it’s time to sell, you’ll find most gold IRA dealers only pay the full bid price when you sell back to your original dealer.
This traps you into selling back to them. And then, if they’ve given you a slightly lower spread on the “ask,” they may apply a charge on your buyback transaction.
It’s important to understand that most gold IRA dealers only make money on sales, not buybacks.
For that reason, you will likely get the best repurchase price from the dealer who sold you your gold.
The only reason you might sell to another company would be:
- Because your original dealer is no longer in business.
- They aren’t honoring buybacks.
- They’re giving you a lousy buyback price.
However, if you go to another company to sell your gold, they won’t have made money on the original sale. So they probably will offer to buy it back at a meager price.
All of this emphasizes an important fact: when it comes to buying gold and silver, the reputation of the company you work with is critical.
You need a dealer to be with you for the long run, not one that is slightly cheaper by a fraction at the start.
Remember, this is your retirement savings. And you will need assistance along the way with contributions, distributions, transfers, and buybacks.
I hope these gold IRA lies opened your eyes to what may go wrong with your retirement investments.
Make sure you pick the right company for your golden journey and don’t fall for the slightly lower spread trap.
If the only value a gold IRA dealer has for its customers is being fractionally cheaper, it likely hasn’t built a company of much value at all.
Ask yourself this question:
- Where is the information you are being told coming from? The company or the salesperson?
The salesperson may be telling you things that aren’t true or twisting the truth because they are so desperate to get a sale. But the real responsibility for truth in selling precious metals rests with the company.
They must have a trustworthy compliance system in place and train their salespeople on what they can and can’t say.
One great way to ensure you are being told the truth when big promises are made is to ask for that big promise in writing and ask the CEO or someone from upper management who is listed on the website to sign it.
When companies are truly compliant, it shows in the reviews of customers and watchdog institutions like the BBB, BCA, and TrustLink. You can check out those reviews anytime online.
And if you want to learn how compliance should be run by a company that has made compliance and transparency a major part of its business, check the Augusta Precious Metals’ compliance page.
In a nutshell, remember: buyer, beware! If it sounds too good to be true, it usually is.