Six Myths about Precious Metals that Can Cost You Money

Precious Metal InvestmentPrecious Metals InvestingRecycling and Refining

Jul 25

We are big fans of investing in precious metals. But we have sometimes seen people lose money, most often because they have misunderstood some of the basic principles and facts about precious metals.

We don’t want to throw a wet blanket over your enthusiasm for investing in silver, gold, platinum, rhodium and other precious metals. But because we know that the most informed investors are likely to make the highest profits, we would like to provide you with some reality checks in today’s post.

Myth One: Karat count offers a completely reliable way to know how much a gold investment is worth

A 24-carat gold bar or other item should be made of pure gold, or very close to it. You also can easily estimate how much pure gold is contained in an item that is rated at 18, 14, 10 or another karat count.

The problem is that on those lower karat ratings, you have no way of knowing what other metals have been mixed with the gold. Has the gold been mixed with silver, zinc, or even copper? The lower the value of those secondary metals that have been used to create the alloy, the lower the value of your gold item will be worth per ounce.

Myth Two: Precious metals always increase in value over time

Granted, the trading prices of silver, gold, platinum and other precious metals do generally rise over time. But if you do a little research online, you will quickly discover that trading prices fluctuate over time – sometimes going up, sometimes going down.

So if you assume that you can invest in a precious metal and sell it whenever you want and make a profit, you could be in for a rude surprise.

Myth Three: You can sell your precious metals anytime you want at current trading prices

In principle, that should be true. But when it comes to selling any asset, you have to be aware that you will only get “what the market will bear.” In other words, you will only get what someone will pay you for your items, which is defined as “fair market value.” And if you suddenly have to liquidate your precious metal holdings to raise money, you could end up negotiating with a buyer who is looking to pay you as little as possible for what you have.

In most cases, hurry and rush are the enemies of getting the full value of your metals when you decide to sell them. Being in a position to say, “I have all the time in the world to sell my precious metal for what it is really worth” is best.

Myth Four: Forgeries are virtually nonexistent in the world of precious metals

Granted, forged items are relatively rare in the world of precious metals. But they do exist and if you fall for one of them, you could lose an awful lot of money.

Is that gold bullion bar you are considering really made of pure gold, or are you looking at a fake that has a thin layer of gold that has been plated over a blank that is made of some kind of base metal? We never want any of our customers to be stung by buying forged items. Your best defense is to buy from well-established, reputable dealers who offer buy-back warranties and other safeguards that can protect your investment.

Also be aware of the importance of dealing with a reputable, Better Business Bureau- approved precious metals refinery like Specialty Metals Smelters and Refiners. Why? Because if a dishonest refinery “skims” and keeps only 10% of the value of the precious metals it processes for you, your losses can add up quickly. When you process your hard-to-find precious metals, you don’t want artificial losses. You want profits! Also be aware that you don’t want to be stung by hidden charges and fees for shipping, testing, processing or other services that the refinery charges. You want to know up front exactly what you will be paying for everything. That is why dealing with a precious metals refinery like ours is of paramount importance.

Myth Five: It is still a great time to invest in catalytic converters

Specialty Metals Smelters and Refiners has processed thousands of catalytic converters over the years. We have helped investors make handsome profits from them. But facts are facts. And the new reality is that it is becoming more difficult to profit from cat converters. Why? Because many of the sources of them – from franchised muffler shops to automotive junkyards – are already working with large recycling companies that buy up their used catalytic converters and haul them away. The result? It is hard today to make a lot of money in cats.

Our advice is to look for other sources of precious metals that you can profit from. If you want to know more, check out all the informative posts on our blog, or call our consultants at 800-426-2344.

Myth Six: Quality investments in pure precious metals offer the best way to make money

The happiest, highest-earning customers we have are individuals who have had the foresight to invest in scrap, then unlock its value and take larger profits by having us refine it. If you can acquire a batch of floor sweeping from a jewelry factory for a few hundred dollars, for example, it could be worth five times that much after we test and refine it for you.

To Plan a Sound Investment Strategy, Call Our Consultants Today

We want you to make money by investing in precious metals. (After all, we make money when you make money.) To plan a strategy for profiting in precious metals that is based on realities, not myths, call our consultants at 800-426-2344.

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Barry Lenson

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