FAQ Precious Metals Questions
How do I research a gold and silver dealer before I do business with them?
First, one should determine the industry credentials of the dealer:
- Are they a member of ICTA? (The Industry Council for Tangible Assets – this is our industry legislative and ethics organization.)
- Are they an Accredited Better Business Bureau organization? Know that we pay a significant amount of money for the BBB to “check us out” and of course list us where any client can file a complaint.
- How long have they been in business?
- Are they willing to provide credible client references? If they offer two references, ask for four!
- Don’t be afraid to ask for a bank reference. You are welcome to speak with our Bank of America Business Manager, as we have done our banking with them since incorporation!
- Do an internet search on any firm or dealer you are considering doing business with – Google will help you find customer complaints and blogs. The BBB can also be a good resource to identify significant customer issues and offenses.
- At the end of the day, make sure your dealer has been in business for many years and has a reputation that is as clean as a whistle.
Do you hold the appropriate state and county licenses?
The licensing for precious metals is not a straightforward set of requirements, as it varies by state and county. Fisher Precious Metals is registered with the State of Florida as an S-Corporation with a Sales and Use Tax Certificate and a State Second Hand Dealer license (this license allows us to buy your gold and silver items, such as unwanted jewelry and flatware.) There is no actual state license for gold and silver bullion dealers in the state of Florida.
In Broward County we also hold a Secondhand Dealer/Gold and Silver license that is required for us to buy back your gold and silver scrap items. In the City of Deerfield beach we hold a Business Tax License for our corporation.
While the precious metals business is still primarily unregulated, a dealer that is on the up and up will hold the appropriate license required by their state, county and city in which they operate their business.
Are you fully insured, and with what carriers?
Fisher Precious Metals carries a block policy with a subsidiary of Lloyd’s of London that covers all precious metals, jewelry, diamonds and fine watches. For all precious metals shipped to you, your parcels are FULLY (check fully versus partially) insured for complete value with FedEx, UPS and USPS with an adult signature required.
Does your precious metals firm require a minimum investment?
Fisher Precious Metals does not require a minimum investment. We started small multiple decades ago and we take pleasure in helping new buyers enter the precious metals market.
Please know that do have a minimum on our website for online buying -primarily to deter fraud. Most fraud occurs with credit cards under a purchase amount of $2,000. You can call us anytime at (800) 390-8576 to purchase smaller amounts if you prefer.
At the end of the day, we personally purchased small amounts twenty-five years ago when we began as investors. We are committed to serving both the small and large investor.
What do you recommend as a % of assets to be invested in precious metals?
Quality financial advisers and investment brokers will tell you that a diversified portfolio is your best bet for a long term growth strategy, and that a diverse portfolio could include some precious metals. However, most brokers recommend that the percentage of precious metals in your retirement fund should be around 5-20% depending on your tolerance for risk.
Scam dealers use scare tactics and lie to their customers, telling them that precious metals are the only investment worth making. If a dealer is recommending an inordinately high percentage of your portfolio to be invested in precious metals you can rest assured that THEIR best interest takes top priority and not yours!
We personally will not make a percentage recommendation until we fully understand your mindset and your investment objectives. Generally speaking, most of our clients fit in the 10- 20% range, but there are exceptions.
Can I talk with the owner if desired?
Most of the industry dealers operate from a call center. You will typically be assigned a fully commissioned sales person. Their primary motivation is maximizing their commission percentage. If you face problems they might escalate you to a mid-level call center manager. At the end of the day you are unable to talk to the President or the executive team.
At Fisher Precious Metals we commit to you speaking to John Fisher our President within 24 hours if desired. We do not operate from a call center, nor do we retain fully commissioned salespeople. No one on our team is paid on commission, and every one has a personal position in physical precious metals.
How do you handle and communicate the order and delivery process?
Ask the dealer what you can expect when it comes to your order being explained, confirmed and delivered. Also question them as to what delivery methods they use, the cost of delivery and how they handle missing and/or damaged shipments.
Fisher Precious Metals has a committed “Seven Step Client Satisfaction Process” in which we communicate every step of the order and delivery process (in addition to advising you as to what the best value metals are to buy for your personal financial situation.)
What products do you specialize in?
You need to know if a dealer (especially call center operations) have a focus on specific types of metals. Rest assured that you will be strongly influenced and guided to purchase the type of metals on which they focus. Also, be forewarned that their are many strong arm tactics and “bait and switch” approaches used to move you from buying bullion to purchasing high margin (read high commission) numismatic coins.
Fisher Precious Metals specializes in easily authenticated, highly liquid, low cost bullion products, as we find these products to be the best suited form of precious metals for 95% of our clients. We will provide authentic numismatics, specifically for the collector or the speculator. You will never be pressured to buy any item that does not suit your interest or investment needs.
Do you sell leveraged gold and silver products?
Absolutely NOT! The majority of leveraged gold and silver dealers have been shut down by various states, but there are still a few that remain under different business models. Leveraged gold/silver dealers will sell you precious metals “on margin”.
In one of these accounts, the dealer lends you money to buy gold, on the assumption that gold will go up faster than the rate of interest on the loan. In other words, if you call with $5K, they’ll give you another $20K in credit to make a $25K total purchase of gold bullion.
The sales pitch is that since we all know gold is going up, you might as well maximize your returns by leveraging up. What they don’t often mention is what happens if gold goes through a correction. You’ll likely be asked to send in more cash for a “margin call.” If you don’t, they’ll sell your gold for a substantial loss.
Unfortunately, the leverage rip-off doesn’t end with margin calls. Expect to pay commission on the entire value of the purchase. If you have to pay 3% commission on the whole $25K, that’s actually 15% of the $5K you invested. Then, there is interest on the $20K loan, which may run you 8% per year, adding an additional $1,600 in the first year of holding. With the commissions, this amounts to a staggering 47% of your original $5K investment! Tack on leasing fees, transaction fees, administration fees, storage fees, delivery fees… with many of these accounts, it is nearly impossible to come out ahead.
Run and run fast!
Do you have a product guarantee?
Absolutely YES! If a dealer is not willing to guarantee all products they sell for purity and authenticity do NOT buy from them! Please see our Authenticity Guarantee page, where we outline all of the counterfeit protection and prevention measure we have in place to protect our clients.
How do you test the items I purchase to make sure everything is legitimate?
Counterfeits are increasing in both quantity and quality. We have invested in the best digital authentication equipment available and are also a Bullion DNA Dealer for the Royal Canadian Mint. In addition, we purchase items through the largest and most reputable wholesalers in the world. Read exactly how we protect you with our Bullion Authentication practices.
Will you lock in at a premium amount over the spot price on the phone and commit not to increase the premium/mark up?
Some dealers will exploit the potential benefit of trying to sneakily increase the premiums they charge in order to make a couple extra bucks. They will give you a generic “about $50 over spot on that gold coin” answer on the phone and you then arrive at the office to pick up your gold and the premium has mysteriously risen to $63 over spot. Not us!
Because we operate on a volume basis, it is in our interest to cultivate solid business relationships with as many clients as possible. Having satisfied return clients is our main goal. We are committed to integrity in all areas of our business and pricing is no exception. Fisher Precious Metals will lock in the premium amount over the spot price with you and we commit to that specific dollar amount. You can rest assured that no matter what the spot price moves to when confirming the transaction, you will only pay the premium amount over the spot price that we originally quoted you on the phone.
How much does your company make on transactions or mark up the products they sell?
The bullion business is a very low margin, high volume business. Margins should range from 1% on the largest trades to 4% on the smallest trades. Numismatic coins on the other hand retain a margin of 15% to 75% or more, depending on demand, availability and buyer motivation. Now you know why a large number of dealers try to move clients in to numismatic coins without any merit or reason for doing so other than their own profit margin. Remember, you should only be buying numismatic coins for collecting purposes, NOT for diversification and general investing purposes.
Is my gold and silver fully insured while in transit?
Believe it or not, there are some dealers that will not insure their shipments or only partially insure the value of the metals they are shipping. With Fisher Precious Metals you can rest assured that ALL items are FULLY insured at declared market value while in transit. Once you sign for the items from the carrier they are no longer under our insurance policy and become your responsibility.
How soon after a deal is consummated will I receive my items?
All dealers have to wait until your funds clear before shipping your items. Request that the dealer clearly state and commit to when they will ship your metals upon funds being cleared. Fisher Precious Metals ships items within 24 hours of clearing funds.
Please note that “collected funds” are different than “cleared funds”. When a dealer cashes your check your bank will note that the funds have been “collected”. That does NOT mean that the dealer has received your money. Only when your funds are “cleared” (usually a few days later, but the time frame depends upon your bank) is the dealer assured that they have received full funds.
Also make sure the dealer clarifies if items are back-ordered and how long they will take to ship (by item type.) Sometimes the wholesale distributors will have items on back-order in times of heavy demand. Fisher Precious Metals has superb relationships with our market makers and are typically able to fulfill immediately upon the wholesaler gaining initial back-ordered inventory.
How are their packages wrapped for shipping?
This might seem like an odd question, but some dealers clearly print their logo and “gold and silver” or “precious metals” on their packaging and correspondence. It is important for dealers to honor and protect the privacy of their clients.
We insure that all of our packages are wrapped in non-descript packaging such as tightly packed corrugated boxes, so as to give no indication of the package contents. In addition, any correspondence from Fisher Precious Metals has a non-descript revision of our logo that in no way indicates any reference to precious metals.
What is a troy ounce?
The weight of precious metals coins and bars are typically noted in troy ounces. The troy ounce is a unit of imperial measure, defined as exactly 31.1034768 grams or 1.0971 avoirdupois ounce (the United States measure for ounce.) One troy ounce of Gold is denoted XAU and one troy ounce of Silver is denoted as XAG.
What is the premium?
The premium is quite simply the amount you pay over the actual spot price for a Gold, Silver, Platinum or Palladium coin or bar. The premium amount consists of mint fabrication and manufacturing, distribution, and administration costs incurred by the mint or refiner in making the coin, plus a “mark-up” representing the cost of sale and the profit for the wholesaler selling the coin to a retail dealer. The retail dealer, in turn, will also “mark-up” its wholesale price of the coin to cover its own sales costs and realize a small profit (typically 1 – 4%) when selling the coin or bar into the investor market.
This series of incremental costs applied to a coin or bar as it passes through the distribution chain is a typical market mechanism present in virtually every other industry in existence, from food to auto parts, and houseplants to sporting goods.
Read our article on Gold and Silver Premiums to help you understand the difference in premium in coins that are the same size.
If you see a dealer advertising precious metals at “spot price” or “melt value” – RUN! There is some hook or bait and switch tactic being employed. All reputable dealers buy from the eight international Market Maker wholesalers. We pay a premium over spot, as does the wholesaler. No one buys precious metals for the spot price. No one.
What is the spot price?
The spot price is simply the price at which a commodity could be transacted and delivered on right now. This is in contrast to futures or forward contracts. The spot price of gold refers to the price of one ounce of gold and the spot price of silver refers to the price of one ounce of silver. Gold and silver must be of specific fineness requirements.
The futures prices of a commodity are large contracts that designate a price for future delivery of the commodity, whether it be cattle, corn, coffee or gold. All of the commodity futures are listed on the commodities exchanges and allow producers and purchasers the ability to mitigate price fluctuation risk. The futures contracts for gold, silver, platinum and palladium all represent the futures price for one ounce of that specific precious metal.
How is the spot price determined?
The specific spot price for any precious metal is determined by the specific front month futures contract with the greatest volume. This futures contract can vary by month, from the current month to one or many months out.
What are fractional coins?
Fractional Gold and Silver coins are simply any weight of coin that is less than 1 troy ounce. Fractional coins are available in half ounce, quarter ounce and tenth ounce sizes in both Gold and Silver. Fractional coins carry a slightly higher premium than their 1 oz counterparts, so we only recommend them if you have total budget limitations or are buying them with preparedness barter in mind. Otherwise, we recommend 1 oz coins in both Gold and Silver, as their premium per ounce is lower in comparison.
What is a “self-directed” IRA?
The term “self-directed” simply means that you, the individual, has complete control over selecting and directing your individual retirement account investments. You are empowered to make all of the decisions regarding your investments within the self-directed IRA.
Self-directed IRAs offer a multitude of alternative investments for retirement savings such as precious metals IRAs, real estate, horses, oil and gas LPs, private mortgages, private company stock, and intellectual property.
There are four parties involved with a precious metals IRA. These four parties are you, the precious metals dealer, the IRA custodian/administrator and the precious metals depository.
What criteria is used for precious metals IRA products?
All products involved with precious metals IRAs must meet minimum fineness requirements as set by the IRS. Please note that the Gold American Eagle is the only exception.
- Gold: .995 fine
- Silver: .999 fine
- Platinum: .9995 fine
- Palladium: .9995 fine
Any products falling outside of these ranges, excluding American Gold Eagles, are not approved for precious metals IRAs. A few examples of non-approved precious metals products include Krugerrands, 90% silver and any collectible, graded or certified coins. Click here for a complete list of IRA approved precious metals.
Is there a minimum amount required to open a precious metals IRA?
We are one of the few national dealers that has no minimum requirement for our precious metals IRA. That being said, we recommend that you allow us to help you assess the start-up costs and annual custodian fees in order to determine what minimum investment will profitably offset the custodian fee structure. We’ll make sure that you get the best precious metals IRA that meets your needs.
Can I add or contribute coins or bullion that I already own to my precious metals IRA?
No. Except in the case of transfers or rollovers all contributions must be made in cash. The physical precious metals that you select for your precious metals IRA will be shipped directly to the depository and maintained there on behalf of your IRA account.
Can I transfer money from an existing IRA account to fund my Precious Metals IRA, and if I do so, will I incur any tax penalty?
Yes. If you have an existing IRA or 401(k), the simplest way to set up a new Precious Metal IRA is via a metal (i.e. gold IRA) transfer. You would simply transfer the amount you want to invest in the new IRA. There will not be any tax penalties for a transfer. The IRA custodian is an expert in transfers and will assist you in facilitating this process.
What types of IRAs are eligible to transfer or roll over?
All IRAs, including Traditional, Roth, SEP, SIMPLE and Solo are eligible for direct rollover. Please inquire with your IRA custodian for specific plan details or any plan limitations.
Can I open a new IRA with a contribution?
Yes, you can open a new IRA with a contribution. Your annual contribution limit will remain the same.
Who holds the precious metals in my IRA?
You will select an IRS approved precious metals custodian that will manage your physical precious metals at a designated depository in Delaware, Canada or Grand Cayman. You will also select which of the three approved depositories you would like your precious metals stored at. At your direction, an IRS-approved precious metals custodian manages your physical precious metals. The custodian will provide you with consistent reporting on your precious metals IRA and earnings.
Precious Metals ETFs vs. Precious Metals IRAs
A precious metals ETF is best suited for investors and traders that desire to move in and out of markets quickly. ETFs are a paper instrument with counter party risks, and do not allow you to take physical possession of your gold and silver. On the other hand, owning physical precious metals is better suited to individuals that want to buy gold and silver and hold it longer term. If you own the physical precious metals within your self-directed IRA, you always have the option of taking physical possession of the actual gold and silver.