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Educational Consumer Tips

Buying Gold

Author: Better Business Bureau
Published:

11/27/12
If you’re interested in purchasing gold jewelry, than check out the BBB educational tips below. However, if you’re interested in purchasing gold (such as gold coins or gold bullion) for investment purposes, skip to the tips below from the American Numismatic Association.

Gold Jewelry

The word gold, used alone, means all gold or 24 karat (24K) gold. Because gold is soft, it is usually mixed with other metals to increase its hardness and durability.

The karat quality marking tells you what proportion of gold is mixed with other metals. The most common marks for gold jewelry are 18K or 750 (signifying 75% gold), 14K or 585 (58% gold), and 10K (42% gold). Ten karat gold is the lowest level allowed under U.S. law.

Jewelry made of higher-karat gold is more yellow in color and slightly softer than gold jewelry made of lower-karat gold, which may include copper, silver, zinc, or other metals. Consumers also need to be concerned with the alloys if they are allergic to certain metals or have a high acid content in their bodies. Acid can turn the jewelry you wear black, appearing to be of poor quality when it actually is not.

A wide choice of styles and designs is available in gold jewelry. Because of its creative design and manufacture, designer jewelry may cost more than generic gold jewelry, but having the designer's name stamped inside increases the value of the piece.

To be sure you are receiving the best value for your money when buying gold jewelry, follow these tips:

· Be sure the item is clearly marked with karat weight and manufacturer.

· Note if the item will be susceptible to damage in the future.

· Be sure the karat weight of the item is listed on the sales receipt. 

Gold Coins or Gold Bullion

If you’re interested in buying gold as an investment in the form of gold coins or gold bullion, check out these tips from the American Numismatic Association:

  • Only work with reputable gold dealers. Your dealer should be a respected name in the industry with experience selling gold bullion in fluctuating markets. Check out the dealer’s reputation at www.bbb.org and the American Numismatic Association at www.money.org.
  • Know the actual cost per ounce of precious metals. Gold prices fluctuate daily, so check that day’s spot price prior to making a transaction.
  • Understand the fees and/or commissions involved.
  • Arrange for timely delivery If immediate delivery is not possible, obtain from the seller in writing specific confirmation about the delivery date. Only then should you execute your order.
  • Know that all investments come with risks. If you intend to buy bullion coins for investment purposes, your best protection is to spend time learning about the coins before you buy them. Uninformed buyers who make hasty purchases often overpay. Like any investment, there are no guarantees – and no one can predict with certainty that gold prices will remain at the current levels or continue to appreciate.
  • Protect against identity theft. Do not give out credit card numbers or bank account numbers or other private information such as Social Security numbers over the phone to anyone not known to you.