Gold & Silver as Investments

In this issue we asked Mark Hutto of J. Austin & Company to answer some commonly asked questions about investing in precious metals.

What are the options available to someone who wants to invest in Gold or Silver?

There are two main ways to invest. One is through ETFs (exchange-traded fund). This is done via the commodities exchange through an online account or broker. The buyer never sees the metal he or she is investing in, it is simply bought in a similar fashion to how one would buy stocks. If you trust the idea of investing electronically, invest in ETFs; However, most people who invest in metals do not like the idea of having only a piece of paper to show their investment.  They want physical metal, because it’s common knowledge among precious metals investors that there is not enough physical metal to back up all of the electronic purchases. To purchase physical gold or silver for investment one must buy coins, rounds or bars.  For gold the old main stay used to be the Krugerrand coin minted in South Africa.  Today the US government mints the American Eagle coin; Canada, China and Europe all have monetized coins that are government minted, reliable and trustworthy for investment. Gold and silver bars are not monetized, they are simply units of precious metal. Most gold bars are made in Switzerland and are marked .999 along with a serial number, some bars are made in places such as Australia or Turkey.

How can one tell by the markings if a coin or bar is real?

As I previously mentioned, gold coins or bars are marked for purity and are made by a government authority or private mint that guarantees their metal content.  Silver bars and rounds are also commonly marked “.999 fine”. All units should display the metal type and the weight of the metal on the unit itself.

Are there counterfeit bullion bars and coins on the market?

Yes, there are some counterfeits, just like in paper money. Counterfeits are very rare in Ashland or Medford, but we have spotted one fake bar in our shop in the last 12 months. There are several ways to spot them. We use the specific gravity test on the gold coins that come into the shop. A counterfeit coin can be easily detected if the specific gravity is not spot-on. In the case of the one fake we detected, it was filled with tungsten, so the specific gravity was very similar to pure gold, but not close enough to go undetected.

 

Is it possible for customers to exchange something like old gold jewelry, coins or diamonds for investment grade gold or silver?

We are generally in business to trade anything on our buy list for gold, silver or cash. We get several requests like this a week. Simply ask to be paid in the equivalent of gold or silver bullion when you bring your items in.  

So again, how do I know that what I am buying is real?

At J. Austin & Company we have methods to insure authenticity. For example in our shop we have what is known as a specific gravity scale.  By knowing the density of an item we can guarantee what it is. Also in the case of larger bars we use ultrasonic technology to insure purity.  We are the only shop in the area using this advanced technology to insure customers are getting what they pay for.

About Mark Hutto

Mark Hutto has a passion for precious metals and rare collectibles. As young college student he and his wife Andrea took to the road traveling Eastern Europe collecting and selling rare coins, gold and silver jewelry and
precious stones. Eventually their passion grew into a full blown business specializing in wholesale and retail of precious items. Mark is the owner of
J. Austin & Co. located at 1642 Ashland St. in Ashland, Oregon. ( Two doors down from Radio Shack.) Read more about Mark in our August 2012 Edition Interiew available online or visit him in person.
www.LocalsGuide.com