I have been educating the public the last 15 years about precious metals industry standards, unscrupulous business practices, high pressure sales tactics, misleading or articles containing misinformation, articles and videos disguised as research yet are simply promotions, as well as, paid or purposely created reviews. Now many of these dealers who have participated or used these methods to gain business and profiteer off the public, are trying to convince the public they are the “white knights”.
The industry has no oversight or regulation. Regulators only get involved after losses have been reported and the money or metals have gone missing. I have not seen any regulators try to create or enforce advertising, disclosure, or transparency standards. How do I know this? Because I see these practices go on every day.
Precious metal dealers, self-directed IRA Custodians, depositories, dealers that provide third party storage, structured programs, pooled programs, digital programs, and many other businesses in the precious metals industry can say whatever they want to attract the consumer’s business. A common theme among all these businesses is their agreements and how they use hold-harmless and limits of liability clauses, waiver of jury trial clauses, methods of delivery for changes to the user agreements, multiple corporate entities to hide and protect owner’s capital and reduce their liability, and so many other questionable business practices, all to protect their interest and not the consumers.
We buy physical precious metals for many reasons. For insurance from the financial system, purchasing power protection, estate planning, portfolio management, and numerous other reasons. What most buyers of physical metals do not realize is, they are being sold an idea that when using unregulated entities to help with their investment objectives, the very concerns consumers are trying to protect themselves from may be staring them right in the face as they walk into the world of precious metals. Even taking delivery of your own physical metal purchase has costs. Most consumers over the last 4 years have severely overpaid in premiums or markups, or worse paid fictitious or inflated “spot” prices.
I write articles to educate the public on options and choices they may consider when they construct their financial plan or make decisions that are in their best interests. I wrote an article late 2023 discussing the precious metals retail industry slowdown that was occurring in the USA and other locations. I even discussed the idea of how dealers will use more creative marketing methods to gain business, to survive. What we have seen in 2024, was just that. Over the top advertising, dealers who overcharged now pointing the finger at dealers who blatantly stole or went bankrupt, ideas of massive silver shortages, and countless other events to maintain the consumer’s interest or more concerning an attempt by dealers justifying themselves for trying to maintain high mark ups.
What has been barely discussed or disclosed is what the consumer will get when they sell back coins or bars. The consumer has learned that a new risk called spread risk (the price one pays to the price they get when they sell) has become the costliest risk. This year, as premiums/markups crashed on many precious metals products and bids for coins/bars being sold back at material discounts to spot, a new stress has opened up for most depository businesses.
Most depositories are owned or associated with precious metals dealers (retail or wholesale). With the transactional business revenue suffering, these business models may not be able to support their depository which can be set up as a subsidiary or associated business. Meaning Depositories may not have the proper assets, cashflow, or complete insurance to protect the storage client’s assets after the transaction. Relying on their parent or affiliated company, these depositories have created discriminatory fee practices that add complexity and going concern risk. I would imagine the public and regulators are oblivious to these business models that benefit the sponsor and add risk to the consumer.
For those who want to read actual analysis and educate themselves on various topics without an advertisement or puffery being thrown in your face, feel free to read my other articles. At https://www.goldsilvervault.com/blog/
