What Is Gold Clad?- A Scam! Find out why!
Have you seen the commercials on TV for gold clad coins? Steer cleer of this trap! It is no secret that many people have made lots of money buying and selling gold lately. Unfortunately, many people are looking for a quick buck and gold clad coins are just another way for someone to scam you out of your money.
What Gold Clad Really Means
Gold clad is a fancy way of saying gold plated. Gold clad coins are nothing more than regular coins with some worthless substance as coating. Essentially, gold clad coins are made when gold is bonded to another cheap metal. In layman’s terms, the ‘gold’ you are receiving is practically worthless.
Take 20 gold clad quarters to a shop that buys gold and the person behind the counter will give you a sad look. Perhaps, if you are very lucky, you will receive the $5 they are actually worth. Most gold buyers won’t even accept them. If they do, you will probably spend more in gas to get there. Indeed, gold clad coins are so worthless that they can’t even be melted down because the refining costs would be higher than the value of the gold that is actually in the coins.
Avoid The Scam
If you have not seen any advertisements for gold clad coins, they tend to go something like this:
Empathy: The advert will talk about the rubbish economy and how broke we all are. Opportunity: It will go on to explain how these gold clad coins commemorate some event and what a fool you would be to miss out. Bait and Switch: The commercials usually tell you a true story about a real gold coin that increased in value and is now highly sought after. Then they will tell you that their gold clad coin looks like the real coin they just mentioned and could increase in value too. Veneer of Authenticity: The advert will then announce that these coins are officially licensed without any proof whatsoever in many cases. Scarcity: You will be told that it is a limited edition set of gold clad coins and that there are only 10,000 left or some randomly made up figure. Value: They will suggest that the coin is worth $9 but you can have it for $5 or [insert random figure here]. You are also informed that buying in bulk gets you a discount. Justified Cynicism Hopefully, you will pick up the cynicism in my writing which suggests that gold clad coins are a horrible investment. In fact, they are not an investment at all. They are the gold equivalent of a pyramid scheme. Often, these coins will cost $4-5 dollars each but they will be gold-clad quarters. Companies selling these monstrosities try and con you into thinking that there is 24 carat gold plating on the kind when there is nothing of the sort. If you buy a set of 50 $1 gold clad coins for $300 for example, congratulations! You have just spent $300 on something that is worth. $50!
The Real Deal
The laughable thing about many of these gold clad coin commercials is that they make fun of those who spend a small fortune on genuine 24 carat gold coins with a purity level of 99.999%. Such coins may set you back $1,300 but at least you have something of genuine value that acts as a hedge against inflation. With gold worth more than $1,300 an ounce right now, you will not be getting real gold for cheap and if you do!
Krugerrand gold coins are among the most popular actual gold coins on the market. You will have to pay a premium for these coins but keep it below 4%. Basically, if gold is $1,300 an ounce, do not pay more than $1,350 for a one ounce 24 carat gold Krugerrand coin of 99.99%+ purity.
Buying real gold coins with certificates of authenticity (very important) may seem steep but at least you get what you pay for. With gold clad coins, all you get are some pieces of inexpensive metal and you pay many times more than what they are worth.
24kt Gold Clad Coins Are A Scam
I know some of you have seen the commercials, magazine ads and Home Shopping Shows selling various coins, sets and collections. You know the ones, touting coins that supposedly were “Just released”, or “From the vault” or “Finally released”.
Then use sales pitches from every angle about were gold and silver spot is and were it could be going, mintage figures to make the coins seem more rare, the age of the coins like it matters most, on their value, and try to convince buyers to hurry now before the deal ends.
These companies or private mints even go as far as to limit the amount ordered to each house hold and talk about “future regret” to sensationalize and try to prompt immediate purchases.
It’s all hype so don’t buy into it. There’s nothing wrong with making a profit as a company but when you influence people’s minds into thinking something is worth more than it is, it’s wrong. It’s no different from the proverbial Snake Oil Salesmen tactics.
There’s several private mints that mint coin with original designs, or they’re commissioned by companies to mint coins for them. It’s these coins that are hyped as “finally released” or “just released” and coins that are .09 mm, 24KT gold coins. Pay close attention to the 9 mm because that means the coin is only clad in a thin layer of gold.
I repeat, these coins are clad in a thin layer of gold and are NOT completely gold!
In example, the 24kt gold tribute Buffalo being sold is another gold clad coin and it only consist of 14 milligrams of gold! At current gold melt (2013 January) the gold value for this coin is less than a $1. So think before you buy and always read the fine print and listen to every single word the announcer speaks, and how they word it.
A centimeter is a very THIN layer of gold, and underneath this super thin layer, is a coin struck in a much cheaper metal.
Does the United States Mint produce or sell gold or silver-plated coins? No. “The United States Mint has never produced or sold, gold or silver-plated coins.” Exact quote from the United States Mint website.
The sad aspect of all this is that these companies have sold gold-plated coins for years and making a huge profit from unsuspecting buyers. The ads and sells are ongoing proving that people are not listening or haven’t heard the truth.
These gold-plated coins might never reach the value people are buying them for and are worth less than the purchase price before they reach consumer’s hands. So beware and only buy authentic coins actually mint by the US Mints only.
