Thursday, January 21, 2010

Gold Buying Companies not a Good Deal

In an article from Times Online reports that the companies that offer to buy gold through the mail are generally not a good deal. The annoying TV commercials that seem like a good deal to get cash quickly may not be a good thing at all. Several companies are being investigated by a British agency, The Office of Fair Trading, because they are accused of not giving the gold back if the customer is not satisfied with the cash offer.

I found it interesting because to most, companies like cash4gold seem too good to be true, and they probably are. A magazine sent three of these companies identical pieces of jewlery bought for $1180 each. In one case, a company only offered $62 for the gold. It might be worthwhile to look into how many people actually sell their gold to these companies. Are these types of companies actually prospering in this economy?

1 comment:

  1. Adam,
    I enjoyed the article. I've always been amused and amazed that ads like these for gold sharks produce enough victims to pay for television commercials. Not that I don't have piles of gold heaped around my house that I'm dying to get rid of, but it's such an effort to put it in an envelope and mail it off. If only there was someone willing to take all my EXTRA diamonds off my hands.
    Gold is precious in many ways, but especially the perception. I had a friend who purchased 10 one-ounce gold coins when they were selling for $800 an ounce. Gold is now selling for $1200 an ounce. Unfortunately for my friend, he bought his coins in around 1980, and soon after, the price dropped to about $350 an ounce. He died two years ago, about the time his coins had appreciated back to what he paid for them.

    The other interesting thing is that commercials advertising gold for sale are frequently on programs of commentators preaching gloom and doom and the end of civilization as we know it. Gold is seen as the ultimate security. For years the economy can rise, and the gloom-and-doomers predict the end of good times. Of course, there is always a bad year, or like the current mess several years, so they claim they were right all along and urge listeners to but more gold, the commercials for which keep them on the air. It comes down to whether one or two bad years each decade is worth investing like every silver (or gold) cloud has a dark lining.

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