Have you been thinking about buying gold and silver on eBay?
Then learn how to avoid the common pitfalls of buying gold and silver through auction sites in this 3 part series of articles. The keys to not getting scammed are 1) Pay attention to the listing details; 2) know what you are bidding on; and 3) know the market price of gold and silver.
I discovered these tips as I have just started investing in precious metals and looked to eBay for some quick deals.
In part 1 you will learn what to pay attention to in the auction listing so you don’t get scammed.
You must read the listing very carefully.
One thing I noticed in many listings is the attempt to mislead novice buyers of gold and silver. Beware of terms such as: “replica“, “copy“, “MILS“, “flakes“, “dust“, and “nuggets.” When these terms are in the title – be sure to pay close attention to the entire listing.
These are a tip off that you may not get what you think. The biggest scam I noticed is the use of the word “MILS.” This is a fancy word meaning the product is merely plated with gold or silver.
Most of the weight is likely copper or some other cheap and abundant metal. A standard MIL is a 60 millionth of an inch. So 100 MILS is about.15 mm or 1 tenth the thickness of a U.S. dime. That one ounce “gold bar” contains only a small amount of actual gold the rest is practically worthless.
When you see the words copy or replica this is a sure sign that you are bidding on a gold plated version of a coin or bar. So a “1 Ounce Replica U.S. Gold Eagle” is likely a copper or nickel copy of a Gold Eagle with a thin layer of 24 karat gold. It will have value but nowhere near that of an ounce of gold. If you are paying more than a few dollars you may be getting ripped off.
Be careful when buying gold nuggets or flakes. The problem with these items is that you do not know the purity of the gold in a nugget or flake. This is even more difficult with flakes as each flake may have different amounts of gold. When you want to sell these forms of gold they will need to be assayed for purity. Flakes would probably nave to be melted and refined before their value could even be estimated.
Many collectable coins are auctioned on eBay. These can be valuable but unless you plan on learning a lot about coin collecting (numismatics), it will be hard to determine a fair price. Theses collectibles may contain gold and silver but their market value is determined more by their rarity than their precious metal content. Thus, their value will be harder to determine when you want to sell them. If you are buying as an investment – stick to bullion products.
I would recommend bidding only on gold/silver bullion coins and bars that are pure. Avoid replicas or plated items at all times. In the next article you will learn how to figure out what you are bidding on. Find out how much gold is being sold and how much it is worth.
