This page is designed for the beginning gold or silver buyer. If you read this you will avoid many costly mistakes and most of the traps set for you by other metals and coin dealers. This advice is based on the mistakes I and people I know have made over the last 20 years.
1) Most of the time the best deals come from dealers with the lowest overhead. So when you see a full page ad in the paper or a fancy TV ad odds are against you getting the best price. These ads cost thousands of dollars and they have to make it up out of your pocket.
2) Beware of the bait and switch. Many companies advertise 1 or 2 items at competitive prices then pay sales people big money to sell you something else. This new item will be priced way too high sometimes double or triple the resale value.
3) Know what you are buying. One full page ad in a major Iowa paper promoted the fact that gold was on its way up to $2,000 per ounce. They stated you had better not miss this great opportunity to buy while gold is only $800 per ounce. I calculated the price they were charging for these $5 gold coins at $1600 per ounce. No where in the ad did it tell you how much gold was in the coins.
4) Be very careful about buying gold or silver and not taking possession of the coins. In the 1980s at least one of these depository companies turned out to not have the customers gold and silver. While most of these companies are good, this one had just spent the money!
5) Do not trust any one who promises you a buy back price. The gold and silver markets are just too volatile.
6) Know your goals and avoid fads. If your goal is to invest in gold or silver you should not be straying into numismatics and collecting. As a general rule if you are paying more than 15% above the spot price you are straying or paying too much. Coin collecting/investing is a subject for another day but you can take my word for it that it can be much more satisfying than bullion ownership.
7) Beware of paying significant premiums for certified modern (after 1960) gold or silver coins. Ms-69 coins rarely trade between dealers at a premium and although some ms-70s have premiums in this market most do not. I believe that when the market for gold and silver softens as it inevitably will, there will be no premium for ms-70s. NGC and PCGS are great companies, their holders will protect your coins and there grade opinions are vital to the numismatic market but don’t forget you are investing in gold or silver not plastic. Paying $10-15 more for this protection may make sense on a 1ounce gold coin but that same increase in price for silver will nearly double your cost per ounce.
8) Take care of your coins. 999 pure gold is soft and will get marked up very easily. This may reduce the value of your gold by 1-3%. Silver will oxidize if exposed to air and this may reduce the value.