Buy Gold And Silver And Don't Get Ripped Off: What To Look For When Investing In Coins

Many investors buy gold coins in order to add growth potential and stability to their financial portfolios. Just as with any investment, the buyer has to do their homework in order to ensure that they receive a good deal. There is always the potential of scam artists in any industry, including the gold and silver coin industry. Thankfully, there are numerous methods for spotting and avoiding bad deals plus a number of reputable agencies that authenticate and value gold coins.

People can buy gold in order to make an investment and be confident that they are receiving a fair deal by following a few safe practices and always double checking any transaction. The old clichés still ring true today: let the buyer beware, and a deal that seems too good to be true usually is.

Authenticity is the cornerstone when investors and collectors alike buy gold coins. Trying to sell a fake coin is probably the most common scam out there. Sometimes, the coin is misrepresented in its grade, meaning that a coin is being sold as a higher quality and at a higher price than it actually is. Other times, unscrupulous sellers might try to sell an outright counterfeit coin.

The best way to verify the authenticity of any purchase is to only buy gold coins that are slabbed. Slabbed silver and gold coins come in a sealed plastic container that shows the condition of the coin, is labeled with the coin's grading, and displays the credentials of the certifying agency. Slabbed coins are almost always legitimate when graded and certified by a reputable agency.

There are three big grading agencies that are trusted throughout the industry. These are the Professional Coin Grading Service (PCGS), the Numismatic Guaranty Corporation (NGC), or the American Numismatic Association Grading Service (ANACS). There are also lesser known or newer grading agencies in the market. When using a different agency than the three listed above to buy gold coins, always research the grading company. Contact a trusted friend or dealer in the coin industry, the Better Business Bureau, and the authorized dealer lists published by the American Numismatic Association.

Some people and companies that deal in silver and gold coins will sell pieces that are not slabbed but are instead either loose or in non-standard plastic holders. The risk of doing business in this manner is much greater than when dealing strictly with slabbed gold coins. For this reason, it is best to buy gold coins in slabs for everyone but the most expertly knowledgeable trader.

When investing in silver coins, there is an easy method to determine if they are made from pure (90%) silver or are just silver clad. Silver coins make a distinctive ring when they are tapped together. Any coin with a lower silver content will not make this sound.

Another method for spotting pure silver coins is to weight them. Fake coins will always be a different weight than real silver coins due to the different metal contents. Use authenticated, real silver coins to measure their correct weight and compare that to any pieces that are suspected of being fake or merely silver clad.

There are a few places that deal in silver and gold coins that are less than reputable. It is not a good idea to buy gold coins on eBay or similar online auction sites. It is very easy to misrepresent silver and gold coins online. The pictures that are offered online are often of too poor quality to make a good determination of the overall quality of a sale. Furthermore, there is no real guarantee that the item described and pictured in an auction is the item that will eventually show up when ordered. Finally, online auction sites are a common entry point for foreign counterfeit coins. Worst of all, if one buyer is duped into making a bad purchase, they can inadvertently or purposefully pass on bogus sales to the next person. Even a seller with a good rating can pass on bad deals on silver and gold coins.

Pawn shops are also a bad idea. Proprietors of pawn shops are in the business of buying low and selling high which makes it extremely difficult, if not impossible, to sell or buy gold coins for their actual value.

The best place to buy gold coins is through a reputable dealer.

Dealers that have been in the industry for 30 years will often have the experience and knowledge to help guide investors in making good decisions. To ensure that the dealer is indeed a trustworthy source, make sure they are authorized through the Professional Coin Grading Service (PCGS), the Numismatic Guaranty Corporation (NGC), or the American Numismatic Association. A call to the Better Business Bureau is also a good idea. Overall, a reputable dealer is a great resource for investors wanting to build a portfolio and buy silver and gold coins safely and with confidence.

Not every bad deal is the result of a scam or deliberate attempt at an unscrupulous sale. Investors have to beware of common pitfalls that can make silver and gold coins appear to be worth more than they are. For example, the two biggest drivers of the value of a coin are its rarity and grading. Rare pieces that are in good condition will often demand a high premium from, both, investors who are looking for value and collectors who want to complete a set.

The pitfall in this methodology is common date coins in high grades. Common date coins are typically not graded and registered through a professional agency, since people do not want to pay the fee to appraise a coin that has little value. As a result, these common date silver and gold coins could mistakenly show up as rare when, in fact, they are actually rather common. A record of graded and slabbed coins might show just one grading of a coin but that is because only one person decided to grade one.

The avoid this problem, look for key and semi-key dates. These dates focus on coins that have high value and are truly rare. To find key dates, look up their book values in the "good" grading level. These dates will reflect truly rare silver and gold coins that are worth investing in.

Before making any investment, buyers should always educate themselves. This fact remains true in order to buy gold coins at a fair price. Investors do not have to be coin experts or dedicated numismatic scholars to be able to spot a good deal. There are a wealth of resources online and in print that will help collectors and investors make sound purchasing and selling decisions in order to buy gold coins that have the best potential for long-term appreciation.

Research begins with the Official Blackbook Price Guide to US Coins. This resource and price guide offers solid guidelines and facts on appropriate market values on a wide range of silver and gold coins of all types and issue dates. While any person can undervalue or overvalue a coin for any number of reasons, published guidebooks are a reliable source of objective information and practical pricing techniques.

All of the grading agencies mentioned above also serve as excellent resources for the investor who wants to buy gold coins. Most of these agencies have price guides that they publish as well. The American Numismatic Association is another great source for research and educational resources. A reputable dealer will also have good knowledge of the history of the industry, current trends, and possible future scenarios.

Market research also plays into coin investing. The price of commodity metals like silver and gold will have an impact on coins. While many coins derive much of their value form scarcity and demand, the value of the underlying metals is always a significant portion of the total price of any given coin. Timing transactions can have an impact when it comes time to sell or buy gold coins.

Furthermore, never sell a coin for less than the market value of its metal content. On the flip side, anyone who does try to sell a coin for less than the market value of its metal content is also probably looking to run a scam. If the coin truly contained the advertised amount of metal, no one with knowledge of the current market prices of silver and gold would sell it for less than that value.

Overall, it pays to buy gold coins as an investment. The ability of coins to appreciate in value over time presents a powerful opportunity for investors to growth their wealth. With a little care and research, plus a reputable dealer, investors can be secure in their transactions.

American Numismatic Association - This is the website of a non-profit organization that is dedicated to educating people to learn the history of coins and currency. Collectors and investors can both find a wealth of information.

Numismatic Guaranty Corporation - One of the top agencies that certify and authenticate gold coins. This site includes pricing and historical guides, a registry of coins, and an application to check the certification number on a coin.

Professional Coin Grading Service - Another one of the top agencies that certifies coins and helps standardize the industry. Visitors can authenticate any coins in a PCGS slab as well as find the value of a PCGS coin.

American Numismatic Association Grading Service - A top three agency, again, offering coin certification and authenticity services. This company grades and values coins and offers official ANACS slabs to show a coin's authenticity for purchase or sale.

Grading Coins - Ever wanted to know the difference between MS60 and XF45? This website contains a guide on the grading used to determine a coin's condition and value based on its amount of wear and tear.

US Coin Grading - A handy visual chart comparing and explaining the grading scale used to determine the condition and value of gold coins. The chart includes the grade and grade abbreviation for each entry.

Independent Coin Graders - Another service for investors and collectors to utilize to grade their coins and check on the authenticity of any potential purchases. The ICG, like other grading agencies, puts out its own slab for holding coins.

US Coins Glossary - An expansive glossary that explains nearly every term that is involved with coin collecting, grading, or investing. Also includes descriptions of some common collectible coins and how they are abbreviated.

eBay Coin Tips - Buying coins on eBay is a very risky proposition. The best way to purchase coins is through a reputable dealer. However, for those collectors or investors who are insistent on using eBay, these tips will help avoid the worst scams out there.

Avoiding Scams When Buying Gold Coins - This community-created guide adds some additional useful advice on avoiding gold coin scams to help you make the best purchasing decisions.