On August 4, the Commodity Futures Trading Commission’s Office of Customer Education and Outreach (the OCEO) issued a Customer Advisory regarding suspicious precious metal recommendations. Due to the relaxed rules under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), unregistered gold and silver dealers have increasingly been encouraging investors (1) to convert their retirement savings into investments of gold or silver coins or into self-directed gold individual retirement accounts, and (2) to make leveraged purchases of physical metals. These schemes often involve expensive premiums and hidden one-time or monthly fees. Further, physical metals such as collectible coins may be difficult to value objectively, and they do not have a liquid market.

The OCEO advises that customers should consult with registered or legitimately qualified advisors, such as commodity trading advisors, investment advisors, financial planners and certified public accountants, before investing in precious metals. Customers should not purchase precious metals based on a cold call, unsolicited email, social media post or infomercial. In addition, customers should compare costs, assess spot prices and confirm all fees in writing before making a precious metals investment.

For more information, please see the Customer Advisory, which is available here.