Scammers Want You to Buy Gold Bars – Here’s Why

Someone has just stolen your box full of gold, which contained your entire fortune. It sounds liek something that would happen to a Victorian nobleman or a traveler during the golden age of piracy. But it could happen to you, too. Except these days, it’s not pirates or bandits robbing you of your gold. It’s scammers running gold scams.

Gold is a hot investment right now. In addition to seeing huge increases in value throughout 2024, many people trust it as a safe, stable investment. But wherever there’s money, there’s scammers looking to steal it. And they’re using both this price increase and people’s trust in gold to target everyone with a variety of gold-based frauds.

What is a Gold Scam?

“Gold scam” is a broad term that covers any scam involving gold. That includes many different types of scams, such as investment scams and impersonation or impostor scams. In fact, gold can be incorporated into almost any scam. And sometimes, it’s not even gold – some investment gold scams use silver, platinum, or other precious metals instead.

Most of the time, though, people talking about gold scams are talking about the most common type, where scammers convince you to turn all your money into gold bars and send those bars to them for “safekeeping.” This scam especially targets senior adults, who tend to have a larger nest egg and are more receptive to the idea of gold as a safe investment. But under the right circumstances, anyone can be a victim.

One question you may ask is, why gold? And the answer is that scammers like gold for the exact same reason they like the other payment methods they use. Scammers love wire transfers, gift cards, payment apps like Zelle and Venmo, and cash when they can get it for a few reasons. These methods are mostly anonymous, entirely unrefundable, and nearly untraceable. Gold has all of these features too, which means scammers are glad to get their hands on it.

The Most Common Gold Scam

The most common type of gold scam, like most scams, starts with unsolicited contact. This may be someone calling, texting, or emailing you. Or you may get a letter or see a pop-up on your computer saying that there’s a problem and you need to call a phone number to resolve it. The person who contacts you (or who answers the phone when you call them) may pretend to be a law enforcement officer, a federal agent or employee of a federal agency, an IT support person, or your bank. And they need to tell you about a problem.

What the problem actually is can vary. They might say your accounts or your identity were compromised, or someone used your information or accounts to commit fraud. Whatever the reason, your money is not safe. If you don’t act now, you’re going to lose everything. But they have a solution. They have a system, account, or vault that can keep your money safe. All you have to do is use your money to buy gold and give it to them for safekeeping. Your money will be protected and you won’t lose anything. If you don’t work with them to take care of this immediately, the consequences will be horrendous.

If you follow their instructions, they will direct you to buy gold and deliver it to a courier. This courier may be in league with the scammers, but they aren’t always. Sometimes they are a scam victim themselves – while the scammer is manipulating you into giving them gold, they’re manipulating the courier into delivering it. Sometimes they are just a person the scammer hired and may not know what they’re involved with. Regardless, the courier will drive your gold away and you’ll never see that money again.

The Gold Investment Scam

Another variation on gold scams uses a fake investment in gold (or sometimes another precious metal, like silver or platinum) to steal your money. It usually starts with unsolicited contact – a phone call, an email, a text message, an online ad, or a brochure mailed to you. Sometimes they impersonate a genuine company, investment advisor, or financial guru. But they offer you a great investment opportunity in gold.

This scam often targets retirement savings. Most people’s largest investment is there, and people want a safe and guaranteed investment for their retirement. These scammers tout gold as a safe investment and push you to open a new kind of retirement account to invest in it. But it’s not always retirement savings. This scam can look like a regular investment, too.

In some versions, this is done online. The website where you bought your investment gold is an impostor site or entirely fake, and any money you invested is gone. Another version, though, straddles the line between scam and fraud. It involves salespeople who pose as financial advisors. Unlike real advisors, though, they have no obligation to work in your best interest. They convince you to turn your investments into precious metals. But they charge huge and unnecessary fees. These fees can funnel half – or more – of your investment to these scammy salespeople.

Whatever method they use, there are some commonalities. They use high-pressure sales tactics. And they give overblown or completely false claims about the value and returns of gold investments. They may tell you about incredible returns or make promises or guarantees. But these are almost always outright lies.

Gold as a Payment Method

Gold scams aren’t the only place where gold shows up in scams, either. Scammers want money, and almost every scam involves a part where the scammer tries to get money from the victim. That money has to get to the scammer somehow. Scammers want that method to be as untraceable and unrefundable as possible.

Gold is completely anonymous, impossible to trace, and equally impossible to get back after you’ve given it to someone. So some scammers have started requesting their victims pay in gold – either leaving it somewhere for an associate to pick up or delivering it to a courier who takes it. One of the major signs of a scam is suspicious payment methods. And gold is definitely a suspicious payment method. It’s not as common as faster methods, like payment apps or gift cards, but it still happens.

How to Avoid a Gold Scam

Aside from the money going to the scammer being in gold form, most gold scams have a lot of similarities with other types of scams. So you can avoid gold scams by being alert for the general signs of a scam, like unsolicited contact, feeling strong emotions, pressure and urgency to act now, and unusual payment methods. Double-check anything that feels strange – and if the person talking to you doesn’t want you to double-check, be even more suspicious.

Anything that asks for gold is suspicious. In the modern world, there’s no legitimate situation where giving someone literal gold bars is a solution. As a general rule, you should be suspicious of any payment method that you can’t use to buy a candy bar at your average drugstore. That includes methods like Zelle, Western Union, iTunes gift cards – and gold bars.

Above all, verify the story before giving anyone money in any circumstance. No matter what the story is, if they’re not a trusted person that you’ve known for a while, verify it first. And if it is a trusted person that you’ve known for a while but you’re not talking to them in person, still verify it. With the rise of AI, your loved one’s voice on the phone or picture on a video call may very well be fake. A legitimate person, whether they’re your best friend, a bank representative, or a government agent, should have no problem with you taking a moment to verify a story before you send money.

Especially if you find yourself feeling any strong emotion because of something someone is telling you, stop and think. There is no legitimate situation that can’t wait ten minutes for you to think and verify.

Avoiding the Common Variety

The common gold scam tells you that your money isn’t safe and it must be protected in the form of gold bars. But the very concept of protecting your money by withdrawing it and putting it somewhere else is suspect. And there is almost never a legitimate reason that you have to give your money to someone else for safekeeping.

If there’s a courier involved, you should also be suspicious. There are many ways to move money securely that don’t involve putting a box of gold in a stranger’s car. And a legitimate bank or government agency is going to be cheap. They’d never pay someone to go pick up your gold. Either they would skip the gold and have you use an electronic method or they would tell you to take it to their local office yourself.

Finally, for any situation that involves moving a lot of money or converting your money into a different form, talk to someone first. Call your financial advisor, or if you don’t have one, call your bank. They can help you determine if the request is legitimate and if you should actually take action. If the person telling you to turn your money into gold doesn’t want you to talk to your bank or financial advisor first, they’re definitely a scammer.

Avoiding the Investment Variety

All the warning signs of suspicious investments apply to gold investment scams. Gold usually averages around 7%-8% annual returns. If anyone promises significantly higher returns, be wary. Urgency and high-pressure sales are always a bad idea when it comes to investments. Whether or not it’s a scam, avoid anyone trying to pressure you into an investment. Also avoid anyone who tells you they have a “secret” investment opportunity. Chances are good it’s either a bad investment or a scam. And beware of anyone telling you that they can sell you gold for significantly less than the current value. You can check the current value of gold with a quick Google search.

The Commodity Futures Trading Commission also has additional advice for spotting these gold scams, which they call “precious metals fraud.” You can read all their tips here.

Avoiding Other Scams that Use Gold

Other scams that just happen to use gold are the easiest to spot, because gold is always a suspicious payment method. Unless you’re somehow dealing with an old-fashioned pirate who just boarded your ship, nobody wants gold as payment for anything. If anyone is asking you to pay with gold, especially if they want you to go somewhere and put that gold in a stranger’s car, they’re trying to scam you. End of story.

What to Do if You Got Caught in a Gold Scam

Unfortunately, like cash, gold is extremely anonymous and impossible to trace. If a courier has driven away with your gold, the chances you’re going to get it back are almost zero. But what you can do is report the scam to the relevant authorities and take steps to protect yourself in the future.

Ultimately, the steps you need to take depend on what specifically happened, if they got any information from you in addition to money, and other details. This article is a comprehensive overview of what to do if you got caught by a scam. If you were caught in any variety of gold scam, go through this article and take the relevant steps to protect yourself.