For years, investors have invested in precious metals to diversify their portfolios; however, lately, more and more ordinary Americans have begun buying silver and bullion. Numerous companies have positioned themselves to take advantage of this demand. Unfortunately, not all are reputable. Before you buy cheap gold, learn what our financial expert has to say.

Why Are People Buying?

Precious metals have been in high demand for a long time; however, until recently, only major investors had much interest. According to financial expert Nathaniel Hutchinson, this changed shortly after the election of President Barack Obama.

“Right after Obama became president, several right wing personalities started taking advantage of worried conservatives,” he said. “Using fear-based strategies, they began warning people that the economy would soon collapse, leading to a devaluing of American currency. To insure against this potential calamity, they told ordinary, everyday investors to buy cheap gold.”

The Goldline Scam

A recent scam involving one popular precious metals dealer shed light on the problems associated with many sellers. Ultimately, the company settled with the Santa Monica City Attorney’s office, admitting that it misled its clients and agreeing to refund about $4.5 million to past customers.

“Goldline employees were alleged to have misled customers by encouraging them to buy collector’s coins instead of bullion coins,” Hutchinson said. “Because the collector’s coins cost more than what they were worth, the transaction ultimately ended up being a bad for the investor.”

Should You Buy Cheap Gold?

According to Hutchinson, although there are some unscrupulous dealers out there, you can still find good deals if you know where to look.

“I tell anyone, before you agree to any deal, check out the Federal Trade Commission’s tips on how to buy gold,” he said. “Likewise, you need to think about why you are buying precious metals in the first place. If it’s because you are trying to insure against some potential economic collapse; you may want to rethink what you’re doing. In the end, investing in metals isn’t likely to make you as much money as investing in a public corporation, which has the ability to generate income.”