Call toll free: 1-800-757-7296

How to Tell if Your Gold is Fake

The rising price of gold is making a lot of headlines in 2016 as investors flock to more safe havens.
On February 9th of this year, investors poured the most amount of money ever into gold bullion securities, according to an article in the U.K.’s Telegraph. Whenever gold panics start, you can be sure scam artists will be close by.

Throughout my time as the lead appraiser with the Provident Loan Society of New York, I have seen many consumers come in with gold items that they thought were expensive, only to be disappointed. Sadly, many of these consumers thought their gold coins or gold jewelry would be worth more money later as an investment, but they didn’t research their items well enough. In other situations, the customers overpaid for gold coins that had a high mark-up from the start.
Investors should remember that not all gold is treated equal when it comes to investments. There are many variables that can change the value of your gold purchase. For example, 14 Karat gold and 18 Karat gold are worth different amounts based on the amount of gold they contain. 14 Karat gold is 58.5 percent gold, while 18 Karat gold is 75 percent gold, making it worth more.

Don’t Get Scammed

Some scammers have been known to attempt to sell a lower quality of gold for the price of a higher quality gold, disguising 14 Karat gold as 18 karat gold. Consumers will not be able to tell the difference between the two and can easily be tricked unless they have it appraised.
Jewelry is one of the hardest items to assess from a gold investment perspective because the amount for the design is factored into the original cost. In addition, there are many gold necklaces or gold bracelets with high markups that reduce the amount of return on your investment.
Provident Loan provides short-term loans on all precious metals, so we frequently see consumers who are trying to trade-in gold coins for money. Consumers should be aware that most gold coins also come with markups on both the sale and purchase of the gold coin. In other words, investors will likely pay a 5-10 percent commission to the seller when they buy a gold coin and pay another 5-10 percent commission when they sell the coin. That 10-20 percent markup can quickly take away from your return.

Be Wary of Ads Promising You Cash

When gold prices are flying high, consumers will see TV commercials or newspaper ads, promising great returns on bullion gold. Investors should be leery of the hidden fees that are frequently disclosed after the gold bullion is purchased. Many of these bullion gold sales require investors to pay for storage fees, which is why you should always ask about any storage fees before purchasing gold bullion and factor it into your overall cost and future return.
Precious metals can also provide an opportunity for loans in times of financial stress. Provident Loan Society, which lends money against precious metals, sees an increase in loans whenever consumers realize they can get more money for their jewelry in times when gold is priced higher. As mentioned in this blog post, the value of precious metal is determined by its purity (as measured in karats) and its weight. Reputable pawnshops, such as Provident Loan, keep their jewelry scales in top working condition to accurately assess your item’s real value.
That said, gold can provide a safety net for investors during uncertain times. Gold is the best performing commodity in 2016 and one of the only major assets to post a sizable gain this year, according to CNN Money. Compare those returns to the stock market for this year, and gold as an investment shines even brighter.
As someone who has appraised gold and jewelry for more than two decades, I can tell you not all gold is treated equally. I’ve even appeared on local TV news stations, including ABC Channel 7

and PIX Channel 11,

To describe measures you can take to ensure your gold is genuine. For example, fake gold weighs less than real gold and it will stick to a magnet, whereas real gold will not.
Just make sure you do your homework before choosing to buy gold as an investment.
Read more at Where and What in the World

Leave a Reply

Your email address will not be published. Required fields are marked *