Forgery Crises in the Gold Market and the Ways You Can Protect Yourself from Fake Gold
The phrase all that glitters is not gold is commonly used whenever the appearance of something doesn’t do justice to its true nature. It is, therefore, ironic that the proverb is now being used for gold itself!
Forgeries within the gold market aren’t something new and have plagued both citizens and governments for centuries.
Counterfeit gold and silver coins have recently made resurgence including the discovery of fake gold bars estimated at around $50 million, according to The Times.
Fake gold bars are usually made from cheap metals with pure gold coatings. Chinese counterfeiters are using sophisticated ways to create and inject gold bars and bullions into the market. Fortunately for you, there are a few simple techniques that can help you identify potential fakes.
In this blog, we’ll share a few tips on how to identify fake gold.
Inspect the Details
One way of knowing whether a gold bullion is genuine is to closely examine the color and quality of the metal.
Fake gold coins usually appear too shiny or too dull and may sometimes appear to be casted, leaving behind a grainy texture. Other fake coins might be flecked or mottled on the surface.
Additional forgery signs include misshaped edges or tool marks. Also, look to the rim to determine the presence of forgery.
Counterfeit gold coins are generally created in halves and then glued or soldered together. The presence of a seam that runs along the rim is a strong indicator of a fake.
Get a jeweler’s loupe or a magnifying glass and start comparing the details with an original coin. If you don’t have a gold coin or bullion, go online and closely inspect the finer details.
Is the space between the letters the same? Is there any grammar or spelling mistakes? It may seem unlikely, but spelling mistakes aren’t too uncommon considering that the majority of fake coins are made in foreign countries.
Use a Magnet
Both silver and gold are non-magnetic. If your bullion sticks to a magnet, it’s a fake. Most of the bullions produced in China are made out of iron-based planchets. Since magnets are cheap, this is one of the easiest ways of spotting a counterfeit.
However, a magnet is unable to provide information regarding a coin’s metal contents and some counterfeit coins—albeit a minority—aren’t magnetic.
Judge the Weight
Another giveaway of counterfeit bullion coins is the weight. For example, gold is a heavy and dense metal. Only three other non-radioactive metals have a higher density namely iridium, tungsten, and platinum.
Since all of these metals are either difficult to work with or too expensive, counterfeit gold coins are almost always too light.
If the difference isn’t that noticeable, use an accurate scale. Just keep in mind the difference between an avoirdupois ounce (28.3 grams) and a troy ounce (31.1 grams). A gold bullion coin is 1 troy ounce.
Know the Right Dimensions
Fake gold coins are known to have incorrect thickness or diameter. Counterfeiters often change the dimensions to add weight which ends up making the coin too thick or too large.
All legitimate private and government minters have set standards for their bullions. The details of which can easily be found online.
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