When buying physical precious metals, it's crucial to watch out for high fees charged by some dealers. These fees, often referred to as "markups," "spreads," or "ask-to-cost fees," can significantly impact the overall cost of your investment and your potential profits.

Precious metals dealers act as intermediaries between wholesalers and retail buyers, earning a profit from each transaction. While it's understandable for dealers to make money, some exploit their position by imposing exorbitant fees on unsuspecting customers. These fees can sometimes reach a staggering 33% or more, meaning buyers are immediately at a significant disadvantage, especially when it comes time to sell their holdings.

Instances of dealer greed are unfortunately not uncommon. In January 2022, Lear Capital, a prominent dealer that has since filed for bankruptcy, faced legal action for allegedly failing to disclose millions of dollars in commissions charged to investors in New York. Similarly, in May 2023, Redrock Secured, LLC, and its owner were sued by the California Department of Financial Protection and Innovation for running a fraudulent scheme that targeted elderly individuals, marking up products by as much as 133% and costing their customers near $62 million.

However, it's essential not to let unscrupulous dealers deter you from investing in physical precious metals altogether. There are many gold dealers that play it straight. By staying informed and working with reputable dealers, such as those listed on Metalsmart, you can navigate the gold industry with confidence, ensuring you receive excellent service and fair pricing.

When purchasing physical gold or silver, always be mindful of the fees charged by dealers. Avoid falling prey to excessive markups by conducting thorough research and choosing trusted partners. Remember, with the right knowledge and guidance, you can make sound investments in precious metals while safeguarding your financial interests.