The precious metals market is rife with misleading marketing tactics aimed at hooking eager investors through over-the-top promises and unbelievable deals. One of the most common tactics is the offer of free gold or silver.
For example, some precious metal advertisements claim to offer investors tens of thousands of dollars worth of gold or silver if they set up or roll over their 401k or IRA to a Precious Metals IRA. These precious metals firms rely on the temptation of ostensibly free precious metals to catch investors’ attention and eventual business.
We hate to be the ones to break it to you, but outside of discovering or inheriting gold and silver, there’s no such thing as free gold and silver. You’re going to end up paying for it one way or another.
Free Gold & Silver: The Marketing Tactic That’s Costing Investors
If you’ve spent time researching precious metals investments, especially a Gold IRA, you might have come across advertisements guaranteeing you a considerable amount of free gold or silver. Investors are usually required to set up an account first, but the prospect of receiving hundreds or thousands of dollars in precious metals for free is worth considering, right?
Unfortunately, this is simply an empty marketing ploy leveraged by coin brokers and dealers to generate business. In the crowded gold and silver space, dealers must get inventive to catch the attention of potential clients before their competitors. Companies without a long-standing reputation to rely on will often resort to eye-catching sales pitches.
Investors, especially those newer to the market, easily get caught up in the unbelievable-sounding deals. After all, it’s not every day you’re offered free gold and silver just for doing business with a specific precious metals dealer or broker. In reality, it’s this naivety upon which these dealers depend to catch unwitting investors off guard.
Typically, the precious metals dealers can provide these too-good-to-be-true offers with some clever financial manipulation. Instead of offering “free” gold or silver, these dealers shift the value of the precious metals to other areas. For example, the cost of the gifted metals will be absorbed into a higher premium on the gold or silver you buy.
“It’s like getting more from a car dealership for your trade-in. You’re still paying for it because they’re adding it onto your new car purchase.”
– Steve Rand, Sr. Precious Metals Advisor
Steer Clear: What Red Flags to Avoid When Investing in Precious Metals
The instant you see an advertisement promising thousands in free gold and silver or claiming to waive Precious Metals IRA fees, 🚨 sirens should go off in the back of your mind. Precious metals dealers and brokers often dangle this promise in front of new investors hoping they’ll bite. This is predominantly being used to encourage people to sign up or roll over their IRA to a precious metals IRA. You won’t see any such language when working with reputable and trusted dealers or brokers. Costs will be reasonable, transparent, and upfront.
Precious metals dealers or brokers employing the free-gold-and-silver tactic will usually bake the costs into the premiums, resulting in unreasonably high rates. Although precious metals premiums vary between sellers, you should question prices far above the spot price. Exorbitantly high premiums on bullion coins and bars are a telltale sign that you’re getting a false deal. Some physical metal products can experience high premiums depending on market conditions, so it’s not automatically a sign of dishonest marketing tactics.
Exclusive Language & Coins
Another common red flag to keep an eye out for is the sale of dealer-exclusive coins. Some precious metals dealers secure exclusive agreements with reputable mints and label their coins as “exclusive.” This tricky language is strategically employed to convince buyers that a coin has inherent numismatic value even if it is only worth its weight in gold or silver. Just because a coin is touted as exclusive doesn’t mean it has any rarity, demand, or historical value.
Learn more about exclusive coins by reading our Buyer Beware series:
You’re Paying for Gold and Silver Either Way
Everyone’s on the lookout for unbeatable deals and limited-time offers, but these empty promises are nothing but misleading marketing strategies. No precious metals dealers will seriously hand out free gold and silver without any strings attached. It’s much better to work with a dealer that offers upfront and transparent pricing rather than having to dissect a dealer’s marketing tactics.
How to Buy Gold and Silver Safely
Understand What You’re Buying
When buying gold or silver, it’s always a good idea to familiarize yourself with different products. Understanding what you’re purchasing, a rough price range, and what determines its value can make it easier to sniff out anything out of the ordinary.
Shop Around Locally
Before accepting a price for a gold or silver product, take some time to shop around at different local precious metals dealers. This is a reliable way to get a sense of the range of prices in the market. You can quickly detect prices that are obviously too high or low and accurately gauge reasonable offers.
Look for Reputable Dealers
Equipped with a good understanding of the product you want and a general price range, you can start searching online for reputable precious metals dealers. Generally, you’ll want to work with an experienced precious metals dealer with a proven track record of helping clients succeed.