Buying Gold Scams Exposed: What Greg Allen Wants You to Know Before Investing
As gold reaches new all-time highs and more investors flock to precious metals as a safe-haven asset, it’s becoming even more important to separate legitimate dealers from scams. In a recent conversation with Greg Allen of Allen House Metals, he pulled back the curtain on the most common scams in the gold and silver industry — and gave invaluable advice on buying safely.
If you’re new to buying gold and silver, this article will help you recognize scams, understand premiums and spreads, and make informed choices that protect your investments.
Allen House Metals: https://allenhousemetals.com
Gold Scams Are on the Rise
Gold’s popularity has soared, especially with economic instability and global tension. The Wall Street Journal recently reported that gold has even surpassed the euro as the second-largest global reserve. But this increased interest has also attracted bad actors.
Greg Allen shared a troubling example of a Chinese dealer who convinced investors they were buying real gold, supposedly held in the Bank of China. In reality, the dealer vanished — and investors discovered their “gold” never existed.
Key takeaway: Always do your research, verify a dealer’s credentials, and insist on transparent transactions before you buy.
Gold Is Gold, Right? Not Exactly.
Many new buyers assume that all gold is equally valuable — but the form you choose matters. Greg explained that investors need to understand the different products before they buy:
✅ Bars and Rounds — Bars and rounds generally offer the lowest premium over the spot price of gold. They’re also easy to authenticate and highly liquid.
✅ Coins — Gold coins like the American Eagle or Canadian Maple Leaf often have a higher premium than bars due to their intricate design and legal tender status.
❌ Collector Coins — Dealer premiums for collectible or “numismatic” coins can skyrocket as high as 70% to 130% — and you may never recover this premium if you sell.
The Truth About Premiums, Spreads, and Liquidity
Before buying, you need to understand two critical terms: bid and ask.
- Ask price: What you pay to buy the product.
- Bid price: What a dealer will pay to buy it back.
Greg recommends that investors aim for the thinnest spread — ideally, 5% or less on gold and 10% or less on silver. Some coin dealers advertise a low price up front but offer an extremely low bid price when you sell. This is one of the most common scams in the industry.
Red Flags That Should Make You Run
So, how do you recognize questionable dealers before you send them money? Greg advises looking for these warning signs:
🚩 No transparent pricing — Legitimate dealers list live prices on their websites. If all you see is “call for price,” beware.
🚩 High-pressure sales tactics — Reputable dealers will give you time to make an informed decision, not push you into buying immediately.
🚩 Promoting rare coins or unusual sizes — Coins like 1/10 oz or odd-weight rounds make it hard to calculate premiums and are often used to confuse buyers.
🚩 Endorsements from celebrities — Many dealers pay large commissions to public figures for endorsements. These fees come out of your pocket as higher premiums.
Buy What’s Liquid and Easy to Verify
One of Greg’s most important lessons is to focus on products that are LBMA or COMEX-approved. Gold and silver bars with a recognized mint stamp and serial number are highly liquid and easy to sell. Avoid numismatic coins unless you genuinely want to be a collector — they rarely make sense as an investment.
Avoid the Emotional Trap
Coin dealers often use fear and patriotic messaging to close the sale. Greg’s advice?
Invest with facts, not feelings.
Ask questions like, “What is the spread on this product?” and “Do you guarantee a buyback price?”
By taking your time, doing your homework, and choosing a dealer who emphasizes transparency, you can protect yourself and your money.
Final Thoughts
The gold and silver market can be incredibly rewarding — but only if you understand what you’re buying and who you’re buying it from. Follow Greg Allen’s simple advice:
✅ Stick to recognized bullion products
✅ Demand transparent pricing
✅ Know your exit strategy before you buy
When you put these principles into practice, you’ll be far less likely to fall victim to scams — and you’ll be better prepared to grow your wealth with real, high-quality gold and silver.
Allen House Metals: https://allenhousemetals.com
