Gold and Silver Buying Scams: 10 Red Flags

Buying gold or silver coins with your own savings is simple and legal, and most dealers handle it honestly. But the same few tricks show up again and again in warnings from the CFTC, FINRA, the FTC and the FBI. Once you know them, they are easy to spot.

This page lists ten red flags for people buying or holding physical metal with regular money, and where to report a problem. None of them means a seller is a crook. Each one is a reason to slow down, ask for things in writing, and check before you pay.

One thing to know first: the CFTC says retail metal dealers "are not regulated at the federal level." Nobody checks a coin seller before it opens. That makes your own questions the main protection.

What are the most common gold and silver scams?

Most fall into three groups: you pay too much (huge markups and collector coins), you pay for metal you never get (financed deals and phantom storage), or you are tricked into handing over your money (impostors and couriers). The ten red flags below cover all three.

1. A cold call and steady pressure

The CFTC and FINRA say never to respond to cold calls, unsolicited emails, junk mail, late-night infomercials or pop-up dealers who ask to visit your home. A common pattern is a friendly first call, then a handoff to a more senior "expert." If you didn't reach out, you don't owe anyone a conversation. Say you will look into it and hang up.

2. A deadline, "limited supply" or a price that ends today

The CFTC lists urgency lines such as "There are only two units left" as a fraud warning sign. Real bullion is made in huge numbers and sold every day. A fair price today will be close to a fair price next week, and an honest dealer will still be there.

3. "Free silver" or other big freebies

Offers of free coins or bonus silver sound generous. The CFTC and FINRA say to ask how a company earns its profit if it "appears to be giving away precious metal." The cost is usually built into the price of what you do buy. Our page on premiums and spreads shows how to check the total.

4. A quote for plain bullion that turns into "special" collector coins

Bullion coins and bars are valued mainly for their metal. Collector coins (also called numismatic coins) are sold for rarity or condition and can carry much bigger markups. The CFTC and FINRA call "semi-numismatic" "a made-up industry term."

A 2024 CFTC case in a California federal court shows how the switch works. Salespeople quoted markups of 1% to 5% on common bullion, then sold "premium" coins marked up 91.89% to 129.97%. The court order found that at least 950 people paid over $69 million for coins worth about $30 million. See bullion vs. collector coins for the difference.

5. A financed or "leveraged" deal

Some sellers offer to lend you most of the price if you put down a part, often 20 to 25 percent. The CFTC says that unless the seller is a CFTC-registered exchange or actually delivers the metal within 28 days, the deal breaks the Commodity Exchange Act and may be fraud. In past schemes, no metal was bought at all, but customers were still charged interest, fees and storage. Many buyers simply pay in full, or wait until they can.

6. Storage fees for metal you never see

Some offers say the company will keep your metal for you in a vault or a "bank" it won't name. The CFTC and FINRA note that some fraudulent dealers charged storage and insurance fees "for metal that never existed." If someone else stores your metal, get the vault's name and address, an account in your name, and regular statements listing each coin or bar. Our private vault storage guide covers what a real agreement looks like.

7. A price below the market, online or from a stranger

A gold coin offered well under spot (the market price for an ounce of metal right now) is not a bargain. The US Mint says to use caution with classified ads and online forums, and that a coin offered "below the current market price" deserves "extra scrutiny." Below-market metal is often fake. See how to spot fake gold and silver.

8. A caller who says they are the government, your bank or tech support

This scam doesn't sell you anything. The caller says your accounts are hacked or your name is tied to a crime, then tells you to turn your savings into gold bars and hand them to a courier "for safekeeping." The FTC says no one from the government will ever tell you to buy gold bars and hand them to someone. The FBI puts it simply: "The US Government and legitimate businesses will never request you purchase gold." Our page on the gold courier scam walks through it step by step.

9. A salesperson giving advice who isn't registered

The CFTC and FINRA say many metals salespeople are telemarketers with no investment training. If someone tells you how much of your savings to move into metal, or says prices are sure to rise, that is advice. Ask whether they are registered, and check for yourself on the CFTC's registration check page. No one can promise where gold or silver prices will go.

10. No written price, no buyback price

Ask for every fee, the total price and the delivery date in writing before you send money. The CFTC and FINRA call fees that aren't available in writing "a red flag." Also ask what the dealer would pay to buy the metal back tomorrow. The gap between the buy and sell price (the spread) tells you how much you lose the moment you buy. Our 12 questions to ask a gold dealer turns all of this into a checklist.

How do I check a price myself?

Multiply the weight of the metal by today's spot price and compare it with the quote. That is the check the CFTC and FINRA suggest. The CFTC and FINRA say some fraudulent dealers charged spreads of more than 300 percent.

What gold and silver can't do, even from an honest seller

A fair deal still has limits. Gold and silver pay no interest or dividends. You pay a premium to buy and get less than the selling price when you sell. Storage and insurance cost money, and prices can swing hard or stay flat for years. Anyone who leaves all that out is selling, not informing.

If the money you are thinking about sits in an IRA or 401(k), the pitches look a little different. Our sister site covers gold IRA and rollover scams.

Where do I report a gold or silver scam?

Report to the FTC, the CFTC, your state attorney general and, for anything that happened by phone, email or online, the FBI. You can report to more than one. Do it even if you didn't lose money, because reports help investigators find patterns.

People 60 and over who need help filing can call the Justice Department's Elder Justice Hotline at 833-372-8311 (833-FRAUD-11), a number the FBI lists in its courier alert. If you already sent money, call your bank right away, using the number on your card or statement, never one a caller gave you.