Including Gold in Your Self-Directed IRA? Beware of Counterfeit Coins!
Published on July 26, 2016
Many self-directed investors include precious metals in their self-directed retirement plans. To qualify for a precious metals IRA investment, these assets must meet minimum fineness requirements as set by the IRS (with one exception, the Gold American Eagle). They are as follows:
- Gold: .995 fine
- Silver: .999 fine
- Platinum: .9995 fine
- Palladium: .9995 fine
However, it appears that recently, all that glitters may not truly be gold, according to an article on Investment U from The Oxford Club. The author warns against buying gold coins from eBay, Craigslist, or any vendor that does not guarantee the coins’ authenticity. This is because counterfeit coins from China have been flooding the market. Therefore, (as always) investors are well advised to do their due diligence about the source of these assets. According to a source quoted in the article, these counterfeit coins are being sold to “unscrupulous distributors” through sites such as Alibaba.
These coins from China are made to look like gold bullion coins but are made out of different metals including lead, zinc, and tungsten. Some metals, like tungsten, have a similar density to gold, which makes a very convincing fake. No matter how real they look, these are definitely not what anyone may include in a self-directed retirement plan! The author states that, “Factories in China are busy churning out thousands of fake American Silver Eagles, Canadian Maple Leafs and U.S. Buffalo coins. They’re sold everywhere from flea markets to eBay and Craigslist.”
Avoid those counterfeits and protect your investment strategy by making sure your precious metal investment comes from a reputable source.
- Your bullion dealer should be well seasoned, someone you know and can verify.
- The dealer must have counterfeit-proofing measurements in place to assure no fake product is brought into their inventory; a new device called a Precious Metals Verifier specifically checks for counterfeits and can test most coins that in album sleeves or plastic cases.
- And the bullion dealer must guarantee the authenticity of every product.
If not, find another dealer who can meet these operational standards. Another word of advice in the article is to buy from established dealers who have relationships with government mints. Ask if the dealer’s staff is periodically trained in counterfeit detection as well.
Don’t endanger your self-directed IRA with fakes—any gold coin investment should come with a full guarantee of authenticity from a reputable dealer. Have a question about including precious metals in your retirement plan? Want to understand better how that works? Contact Next Generation Trust Services with your questions about these and other alternative assets at Info@NextGenerationTrust.com or 888.857.8058. You can also read more about investing in precious metals in this article on our website.