For past three years, there has been an unprecedented demand for precious metals, including gold and silver coins and bars. Premiums have been driven up above the (spot) price, due to demand outpacing supply, and time needed for production. Now, since suppliers have caught up, over the holidays, wholesalers have an oversupply of bullion inventory, and premiums are plummeting.
That's because an over-correction is happening now for sales of gold and silver. Interest rates are high. This "fire sale" may continue through February and into March, but then premiums might come back up due to general costs and inflation. General advice coming from the sellers is that it's a good time to acquire gold and silver, but do your "homework" to get the most ounces for the money you invest, say the experts, and be sure it has liquidity in the market (stick to standard, popular products).
Avoiding bait-and-switch tactics for gold and silver products
People are now getting fooled with bait-and-switch sales tactics for gold and silver products. It's nothing new, as it's been happening for the past few decades, but position now is ripe for the "taking," especially with so many "green" buyers and people hearing more about the US dollar collapsing, future inflation skyrocketing, and other prime factors.
Just like with car sales, there are precious metal sales people who might lure you in to some "phenomenal" deal that just sounds too good to believe, or hype up some "numismatic" collection that's massively over-priced to uneducated and uninformed buyers.
Upon digging further into the market, buyers will find semi-collectible coins that are "numismatic" – Numismatics is the study or collection of currency, including coins, tokens, paper money, medals and related objects. There are "proof" gold eagle semi-numismatic coins, and "Proof" silver American eagle coins.
There are also exceptions to bullion – coins that are "specialized" for authenticity, but marked up FAR ABOVE comparable bullion coins of similar comparison. Some salespeople are steering consumers into buying these under "bait-and-switch" schemes that deprive people of the actual ounces of metal they were hoping to get for their dollars.
Red flags and inflated pricing for certain numismatics
Customers (retail market buyers) could lose $300 to $500 per ounce (on gold) trying to liquidate the same coin just days after buying certain numismatics at inflated pricing.
Red flags to watch for: Does the company avoid publishing their pricing online? If so, big red flag. Are they transparent? If not, big red flag. Work with companies that publish prices publicly and don't try to steer you away from getting the most ounces per dollar unless you specifically want collectibles and numismatics.
People who are new to precious metals are often not educated about the industry, and while looking for someone to help them, they can easily be taken advantage of by companies that are out to rook them for their "precious metal" investments. Experts say that "smart money" is going into gold now. Central banks are buying gold in a massive way right now, at 80% more than just two years ago (about 400 tons per quarter).
Don't forget, in a landmark ruling just recently, two former JPMorgan Chase employees were found guilty of racketeering and conspiracy, for manipulating the market of precious metals. The two guilty bankers engaged in illegal "spoofing," a tactic where they used computer algorithms to disrupt trading activity and create artificial pricing for precious metals. Gold and silver are highly manipulated commodities on paper, and the paper market manipulation affects the "spot" prices but doesn't have total control over the real-world price which is spot + premiums.
“The number of investigations, legal cases, class actions and financial headlines involving precious metals manipulation are now so pervasive that it’s hard to keep track of which cases are in motion and which investment banks are under scrutiny at any given time,” reported Bullion Star three years ago. Watch this interviews with Chris Olsen and the Health Ranger for more insight:
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