As Gold Investment Surges, Fake Platforms and AI Drive New Fraud Wave

A widening gap

Nearly half of Americans struggle with basic financial literacy. That vulnerability is increasingly being exploited in gold-related scams, especially among seniors.

In Texas, elderly victims lost more than US$55 million in gold scams. In the Boston area, the FBI documented over 100 instances in the past two years where couriers were used to pick up illicit cash or gold bars, with financial losses exceeding US$26 million. Around 98 percent of those losses were reported by individuals over 60.

In Ottawa last year, police reported an elderly couple lost US$460,000 in a gold investment scam after criminals convinced them to buy gold and arranged to pick it up. The victims were instructed by the scammers not to inform their family members or banks.

The pattern is no longer confined to North America. In Singapore, authorities reported at least 131 cases in 2025 in which victims were persuaded to buy gold bars and physically hand them over to scammers.

Although total scam losses in the country fell to US$913.1 million from a record US$1.1 billion in 2024, police flagged a “concerning trend” of syndicates shifting to gold as a payment method because it is harder to trace than bank transfers.

Five scams gaining traction

Sam Bourgi, senior analyst at InvestorsObserver, says the mechanics of gold fraud have evolved alongside technology. As generative AI tools become widely accessible, scammers can build convincing websites and tailor persuasive messages in minutes.

He has identified five schemes that are proliferating as gold prices climb.

The first is what Bourgi describes as aggressive upselling disguised as opportunity. An investor may initially purchase a small amount of legitimate gold at or near the spot price. The transaction appears ordinary. But soon afterward, high-pressure calls begin, urging the buyer to purchase “premium” coins or collectibles at steep markups.

A second scheme exploits social media. Fraudsters clone the name and branding of legitimate jewelry stores, advertise precious metals at attractive prices, then claim the physical store is temporarily closed.

Buyers are urged to place deposits to “reserve” items. When they attempt to collect their purchase, the address is fake.

A third red flag involves payment methods. Sellers who refuse traceable payment systems such as credit cards or standard bank transfers should raise immediate suspicion.

“Wire transfers are irreversible or hard to trace. No legitimate seller would be against bank involvement. If they are, verify everything they are telling you, through official websites or sources,” Bourgi noted.

Fourth are bogus investment platforms offering gold-backed tokens or digital gold accounts. Investors may see their balances rise rapidly online, only to encounter mysterious “taxes” or fees when attempting to withdraw funds.

“In this case, the money got into scammers’ pockets the second it left your bank. And this is money you won’t get back. It is pointless to pay the mysterious taxes, as your funds are locked inside a fake platform. If it is not a popular website, check reviews, check registration,” Bourgi explained.

Finally, recovery scams target victims twice. After someone loses money in a fake gold transaction, their contact details are sold. A person claiming to be a lawyer or government official offers assistance, but in exchange for an upfront fee.

“Never trust anyone who claims to be a government official or someone else whom you cannot verify from trusted sources. Especially if they ask you to make payments up front. You lost money when you both bought gold, it happens, but don’t make the same mistake twice,” Bourgi reminded.

The role of industry standards

Gold itself is not the problem. The issue, experts say, lies in opaque practices and aggressive marketing tactics.

To address trust concerns in the retail segment, the World Gold Council developed the Retail Gold Investment Principles after consulting 52 industry stakeholders across 16 countries.

The principles emphasize values such as fairness and integrity, transparent pricing, protection of client assets, and regulatory compliance, among others.

The guidelines are voluntary, but they aim to give providers a framework for responsible conduct and a way to signal credibility to investors navigating a largely unregulated space.

For consumers, the red flags remain consistent across jurisdictions: unsolicited contact from so-called “senior specialists,” high-pressure deadlines, promises of guaranteed returns, encouragement to liquidate retirement accounts quickly, and sellers unwilling to disclose fees or regulatory credentials.

Authorities also warn against pop-up messages or phone calls claiming bank accounts have been compromised.

The Federal Trade Commission (FTC) says criminals often impersonate government agents, asserting that a victim’s name or Social Security number is linked to crimes, and then instruct them to convert their funds into gold for “safekeeping.”

The directive is always the same: buy gold bars and hand them to someone. Law enforcement agencies are unequivocal that such instructions are fraudulent.

Caution is the ‘golden’ rule

Gold’s appeal during periods of inflation and market volatility is well documented. But as prices push higher and retail participation expands, due diligence becomes more critical.

Checking real-time gold prices on independent platforms, verifying dealer registrations with state and federal agencies, insisting on traceable payment methods, and consulting trusted family members or financial advisers before making large purchases are just some of the simple but effective safeguards against these schemes.