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Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Gold Coated Tungsten Bars, Chinese Fakes Grow In Complexity

Commodities / Gold and Silver 2010 Dec 08, 2010 - 06:07 AM GMT

By: Dr_Jeff_Lewis

Commodities

Gone are the days of gold coated tungsten bars, shaved or skimped ounce rounds, or completely faked gold painted coins sold as replicas.  Today's gold fakers are using alloys – not coatings – to produce some of the best fakes the physical gold market has ever seen.


More Authentic Than Ever Before

The Financial Times, a financial news source that was one of the few to bring the CTFC silver manipulation to light, has broken this new gem.  Researching heavily inside Chinese gold shops, the Financial Times reports that a new alloy of bullion mixed with seven other metals provides an end product that looks, feels, and weighs just like gold.  The alloy includes such metals as osmium, iridium ruthenium, copper, nickel, iron, and rhodium, and as much as 51% gold.

Some believe that such a concoction could be created only by a metal worker with years of experience and a thorough understanding of the elements that make up each metal.  When mixed, the finished product is hard to detect by color, and the density is much more accurate than gold plated tungsten bars.

The explosion in faked metals is attributed mostly to three factors: increased domestic demand, the ease and anonymity of selling fakes over the internet, and rising gold prices.  The question is now: with silver at $30 an ounce, will frauds discover they can shave dollars off ounces, shipping only half as much valuable metal as they claim?

Protecting Your Investment

The silver markets are ripe for such exploit, although physical silver is less rewarding to fake than gold, given the extreme price differences.  However, with so many silver investors believing this often repeated line, it is probably only a matter of time before new silver fakes come pouring out of China and into the hands of collectors. 

There is only one way to immediately find whether silver or gold bars are authentic with proper assaying of the metal.  However, for small coins and bars, this process is hardly cost effective, and it won't do much to keep the faked metals out of the hands of retail investors.  Investors would be wise to reduce their anonymous purchase quantities through the internet or deal only with highly reputable dealers.  Avoiding online auction sites and individual sellers through the internet, particularly those from China, will mitigate much of the risk.

Professional dealers should have a much cleaner supply than individuals should fakes spread through the market.  Large volume dealers, or those who buy directly from government and private mints, are nearly guaranteed a clean supply, while small coin and pawn shops may be more likely to buy a collection of fakes from an individual.

While there is very little that can be done, silver investors should be on high alert, as it’s only a matter of time before crooks find a new avenue to make a living.  With the economy faltering, unemployment rising, and gold and silver becoming the hottest commodity on the block, there are sure to be more than a few bad apples in the market.

By Dr. Jeff Lewis

    Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of Silver-Coin-Investor.com and Hard-Money-Newsletter-Review.com

    Copyright © 2010 Dr. Jeff Lewis- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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