Nick Hargrave - March, 28th 2023

Is Buying Gold and Silver Online Safe?

Bullion online

Gold and silver are a highly sought after physical asset but, is it something you should purchase online and have sent through the mail? Well, in short, yes. Around a half a billion dollars of physical bullion is sold online and shipped to private citizens all around the U.S. Quadruple the amount is sent to large investment portfolios and even more to central banks on behalf of world governments. This comes with a few caveats though.

The threat of counterfeit bullion

Precious metals are quite expensive, gold is teetering back and forth from it’s historic high of $2,000 an ounce, silver at nearly $25 and platinum around $1,000. To buy something you think is gold, silver or platinum but turns out to be lead filled or clad would be a catastrophic set back financially. The question is, how prevalent are counterfeit bullion, scams, and fraudulent websites?

To be honest, it’s rare and warning signs (thankfully) are extremely noticeable when a website is malicious, but perhaps you aren’t as keen on spotting legitimate or illegitimate websites, there is a solution to this. Online forums such as Reddit’s r/bullion, r/gold, r/silverbugs or a few Facebook groups have a large base of fellow gold and silver stackers can vouch for a particular website you want to verify.

A very telling sign is when a deal is “too good to be true.” As mentioned, moments ago, gold and silver are highly sought after and there is virtually no one selling these commodities online for exact spot price and certainly no one is selling it below spot price. If you see a couple of American Silver Eagles for sale at $19.99 a pop when silver is trading at $25, it’s because they are fake.

Just remember, the authorities do not take counterfeit currencies lightly, so it’s best not to buy from overseas retailers as U.S. counterfeiters would be quickly prosecuted, always verify the website your buying from, make sure your not getting that good of a deal (as funny as that sounds) and invest a little bit in a rare earth magnet, chemical test kit or sigma metal tester to test the metal you receive.

Real and fake Pamp Suisse silver bars

 How To Tell The Difference Between Real And Fake Silver?  Credit: www.americanbullion.com

Package theft

Having been in the industry for years, I have seen one monster box of (500) x 1 oz Silver Austrian Philharmonic Coins go missing. Miraculously, it turned up a few months later. As for our customer base, we have shipped well north of 100,000 individual packages and about a dozen were lost or stolen on it’s journey to our clients.

Bullion retailers like our selves always ship the product tightly packaged (because our money does jiggle not fold) and in discreet packaging. Every package is 100% insured, we all have inside guys at the various mail carrier organizations and close relationships with federal mail inspectors who are law enforcement officials. With that said, theft and non-nefarious loss of mail does occur, but these issues are always resolved and in some cases avoidable.

You can protect or at least decrease the chance of your bullion being pillaged by thieves by providing a precious metals retailer with a secure address. This could mean shipping the package to your place of work where a receptionist is handed the mail, having a secure mail box or forking out the $5 a month to get a PO box to ship your coins, bars and rounds to.

The government knowing about your Gold and Silver

A recent and unfounded conspiracy that has made its rounds on the internet is that ‘buying precious metals online alerts or at least creates a record for the government to access.’ This is simply not true and we are under no requirement as a bullion retailer to keep records on customer purchases or customers in general. In fact, the extent of record keeping is that of any other online retailer which is inventory and profit/loss statements.

In fact, we abide by customer data erasure regulations which requires “permanently and completely erasing the personal information and records on all systems.” While this is something we do upon request immediately, inactive customers are purged from our database on a regular basis and while this is not an industry standard, we know plenty of large bullion retailers share these practices.

Do I have to report my gold coin purchases to the Government?

 No government regulations require the reporting of the purchases of any precious metals.

Overpaying for Gold and Silver online

The final thing to consider is while maybe you’ve found a legitimate website that is sending you authentic bullion, are you getting ripped off? You might notice a single item such as a random design 1 oz silver round going for a huge variety of prices online, why is this?

Precious metals is one of those items that buying bulk is really where you see a discount, this is true on the purchasing side of bullion companies. This means, to get a good deal on gold, silver or platinum, that they can then mark up slightly, these companies have to buy quite the volume. This is all the while the markets (price of precious metals) are moving. It’s actually quite nerve racking because now you have to move a massive warehouse of product and if the prices take a tumble and you can’t reduce your prices because you’ll end the quarter in a loss, now your stuck looking like your company is the biggest rip off in the industry.

And before you go and think, “Yea, but if the prices go up they make a killing,” inventories deplete extremely quick in those environments, including at the wholesalers which brings in a whole new host of headaches and delays for the bullion retailer.

In conclusion, have a couple of online bullion retailers you prefer, stick with them, don’t be afraid to ask the groups on Facebook or Reddit before pulling the trigger but don’t think buying online will be a failure. You might want to stay away from secondary market retailers, big box store websites and auction sites however. But we’ve delt with so many great bullion companies over the years that we are confident you’ll enjoy buying and your investment will be safe by purchasing gold and silver online.

This is in no way to be considered investment advice. Past performance is no guarantee of future results. Asset allocation and diversification do not ensure a profit or guarantee against a loss. Keep in mind that any form of investing involves risk and you should always consult with your financial advisor before making any financial decisions. Investor Crate, LLC., it's subsidiaries and staff will never advise you on any asset as our aim is to provide a fun and affordable service should you decide to purchase Precious Metals.

Keep in mind that investing involves risk. The value of your investment will fluctuate over time, and you may gain or lose money.