Best of the Week
Most Popular
1.War on Cash, Bank of England Planning Hyper QE, Scrapping Cash for Digital Currency - Nadeem_Walayat
2.Stock Market End Run Smash Crash Looks Imminent... - Clive_Maund
3.Europe Refugee Crisis, UK to Repatriate 120,000 Hungarian Economic Migrants Back to Hungary - Nadeem_Walayat
4.The Great Deflation Will Destroy All Bubbles – These Too - Harry_Dent
5.Deflation Signals Abound for U.S. Dollar, Forex Markets and Commodities - Rambus_Chartology
6.U.S. Housing Market Two Outs in The Bottom of The Ninth - James_Quinn
7.Poland, Czech, Slovakia and Hungary Refugee Hypocrisy After Flooding UK with 4 Million Economic Migrants - Nadeem_Walayat
8.The Two Real Reasons Crude Oil Prices Are Currently Slipping - Dr. Kent Moors
9.R.I.P. Interest Rates - Andrew Snyder
10.Steps from a Deep October Stock Market Selloff - Bob_Loukas
Last 5 days
A Key Oil Price Trend That Everyone Is Missing - 6th Oct 15
Stock Market Turn Appears to Have Been Made - 6th Oct 15
Designing a Dividend Growth Portfolio for a Specific Retirement Yield Objective - 6th Oct 15
Peter Schiff Predicts Gold Price Breakout - Video - 6th Oct 15
Theresa May Declares War on Immigration - Conference Speech Full Transcript - 6th Oct 15
Is Russia Plotting To Bring Down OPEC? - 6th Oct 15
Target Date Funds As Aid In Retirement Investment Portfolio Design - 6th Oct 15
Stocks Bear Market Apocalypse Imminent Crash Gets Nuked Again - 6th Oct 15
Redesigning Internet and Facebook to Explore Their Full Potentialities... - 5th Oct 15
Nightshades Curb Your Enthusiasm - 5th Oct 15
U.S. Recession Watch, High-Yield – Rising Defaults - 5th Oct 15
The Social Challenge to Find Humanity in Capitalism - 5th Oct 15
Fed Interest Rate Hike: "I don't care. It doesn't really make much of a difference" - 5th Oct 15
Gold Rose 2.2%, Silver Surged 5.4% After Poor Jobs Number On Friday - 5th Oct 15
Gold, Silver Precious Metals: a Critical Week Ahead - 5th Oct 15
Stock Market Correction Still in Force - 5th Oct 15
Gold Price Change in Character - 5th Oct 15
Putin’s Blitz Leaves Washington Rankled and Confused - 4th Oct 15
More Selling for Stock Market, Gold? - 4th Oct 15
Gold And Silver – A Reality Check - 3rd Oct 15
Stock Market Primary IV Still, or Primary V Underway? - 3rd Oct 15
The Oil Industry’s Day of Reckoning - 3rd Oct 15
U.S. Interest Rate Hikes Keep On Slippin' Into the Future; Treasury Yields Sink Again - 3rd Oct 15
China's Stock Market Crashing; Time for Panic or Restraint - 3rd Oct 15
SPX Stocks Bulls Struggle to Regain the Upper hand... - 2nd Oct 15
The Two Faces of Stock Market Volatility - 2nd Oct 15
Money Supply and the Fed’s Serious Inflation Risks - 2nd Oct 15
Stock Market How Bad Can This Get, And How Fast? - 2nd Oct 15
A Worrying Set Of Recession Signals - 2nd Oct 15
Negative Jobs Report Sents SPX, TNX Lower - 2nd Oct 15
Don't be Fooled by the Recent Equity market Rallies. Its a Bear Market, Stupid! - 2nd Oct 15
US Bond Market - How to Fix This - 2nd Oct 15
Survival Secrets from Colorado Resource Investing Front Lines - 2nd Oct 15
What Two Risks From Rising Interest-Rates Could Each Trigger A New Global Crisis? - 1st Oct 15
Stock Market S&P 500 Volatility-Based Price Probability Range - 1st Oct 15
Dow Stock Market About To Crash Like October 1929? Get Your Physical Silver - 1st Oct 15
Stock Market Negative Expectations Once Again - Will It Break Down? - 1st Oct 15
Advice for Biotech Investors: 'Hold Your Powder' 'til Winter - 1st Oct 15
Best Short-Term Commodity Market Opportunities - Video - 1st Oct 15

Free Instant Analysis

Free Instant Technical Analysis

Market Oracle FREE Newsletter

Seven Ways to Tell If Your Gold is Counterfeit

Commodities / Gold and Silver 2013 Jan 02, 2013 - 07:32 AM GMT

By: Money_Morning


Peter Krauth writes: I had just finished a walking tour of the Royal Canadian Mint when I saw it. Right there, out in the open, was a 400-ounce bar of pure gold.

It was chained to a display table and kept safe by an armed guard. At the time, in 2005, the bar was worth $220,000.

Today, the same bar is worth $667,700. In just seven years, gold prices have jumped by 203%.

But it's not the eternal fascination with gold that has boosted the price. With growing levels of worldwide uncertainties, mounting inflation risks and government distrust, people are clamoring for gold primarily as insurance.

According to the World Gold Council, 2011 saw gold bars and coins reach nearly $77 billion in sales, versus 2002's $3.5 billion. And in November alone, the U.S. Mint's sales of the popular American Eagle coins jumped 131% in the wake of the election.

With the market for gold growing at a feverish pace, it's now more important than ever to know that your gold is the real deal-especially with gold prices looking to break through the $2,000 mark in the new year.

Here's why...

Gold counterfeiting is nothing new. In fact, just recently there were reports of fake gold bars from China turning up in New York. Instead of gold, their centers were stuffed with tungsten.

But rest assured there are a number of methods you can use to mitigate the risks of ending up with counterfeit gold. Some are simple, quick and inexpensive. Others are more elaborate, detailed, and not so readily accessible.

Here are seven ways to find out if the gold you own is real:

Fake Gold Test #1: Size
Whether we're talking about coins, wafers, or bars, the producers of these items usually have very exacting standards. So a little research goes a long way to making sure you get what you expect.

Find out what the true dimensions of the item should be, then compare them to what you have.

To do this, buy yourself a good quality pair of calipers so that you can measure the diameter, thickness or other dimension of your gold item very precisely.

Gold is a very dense metal, so some counterfeiters may make a coin in a wider diameter, in order to compensate for a less dense metal. If you compare gold to iron, it takes twice the volume of iron to equal the same weight of gold.

Plating other metals with gold still allows them to match the proper weight, but the size would be off. The difference could be very minor, but if you know what to look for, you can spot the fake.

Fake Gold Test #2: Magnetic
Gold is not magnetic. So if it sticks, your gold is fake. But to do this, you'll need a stronger than average magnet. The kind available from a specialized hardware store should do it.

Keep in mind that counterfeiters obviously know this too. So they'll typically use metals that aren't magnetic to avoid this type of detection.

Just don't use this test alone.

Fake Gold Test #3: Weight
Obviously, one true and tested way of being sure you get what you ordered is by quantity. And weight is a great way of checking.

Get yourself a good quality, precise scale. Then, based on the stated weight on your coin, wafer or bar, it should match up perfectly.

Keep in mind though, that gold is weighed in troy ounces. One troy ounce is equal to about 1.09714 "avoirdupois" ounces, which is the normal 1 ounce measurement we use in everyday life.

Fake Gold Test #4: Visual
Knowing what you're looking for will certainly help here. It's a learned skill, but keep an eye out for anything that looks odd or abnormal.

A decent, strong magnifying glass goes a long way to pinpoint oddities.

You can search for high quality images of your coin or bar, then compare that with what's in your hands. Be meticulous in your search for minute details, all of which must be spot on.

Gold coins are a good option for gold "investments." You see, counterfeiters will often (but not always), fake larger gold items because it's more worth their while. After all, if you're going to go through all of the painstaking trouble and risk, the payoff might as well be big.

The test methods I've described so far apply to pretty much any form of "investment" gold. But if you take the leap and acquire a larger-sized gold item, there are a few other tests that can be performed for veracity.

The truth is, anyone who owns gold in the form of a larger bar, say 10 ounces and up, ought to consider having it verified.

Fake Gold Test #5: Assay
One option is known as the fire assay test. This is typically used by gold explorers/miners who require absolute certainty that their drilled samples are the real thing.

Fire assays are an ancient method. They are the most widely used and considered the most reliable. The downside is that it involves drilling into the gold bar to provide at least ½ gram (0.2 ounce) to be tested. Some feel removing even a small quantity of the bar will take away from its integrity. But some gold bullion dealers, for their own assurance, will decide to cut your bar if you've agreed to sell it to them.

Another downside with fire assays is that you're really only testing the small portion you've sent to the testers. So if there is a void or other metal in the center of the bar, the test won't find it.

Assay testers will usually take about three days and charge about $35 to test a gold sample. They'll also provide an official signed report with the results.

Fake Gold Test #6: X-ray
X-ray testers are another option to check your gold. Jewelers will sometimes use these to test any gold they buy.

The tester quickly performs chemistry analysis to determine what elements are present in the gold. They also can tell the purity and fineness of the metal.

X-ray testing does have a ±1% accuracy rating, so while minor, there is some chance for error. The other drawback is that it's essentially a surface test, so if there's a void or another material in the center of the bar or coin, then X-ray testing won't detect it.

On the plus side, it's nondestructive and non-intrusive, so the integrity of your gold won't be compromised. You'll know, at least, if the surface of the item is real gold.

Fake Gold Test #7: Ultrasound
Ultrasound testing is a way to "look into" your gold. It uses the same ultrasound technology familiar to all pregnant women.

Essentially, this method scans the item, providing a digital image of the gold bar.

If there is an air gap or other material inside the gold bar, this will show up as a darker area on the screen's image.

This is expensive equipment, so it may be challenging to find someone who could provide testing services.

The advantage is that ultrasonic flaw detectors can actually "see" the inside of your bar, so the results provide a high degree of confidence in the bar's integrity. If you want to see exactly how this works, click here to view a short video demonstration.

Of course, there are other tests you can do to mitigate your risk of ending up with a fake. Probably the single most important thing you can do is to buy your gold from a reputable dealer.

While it sounds obvious, a little research can go a long way. Ask friends or acquaintances for referrals and check the website of a government mint for "partner" bullion dealers.

Also, consider buying from dealers that offer a product guarantee, as well as a future promise to repurchase anything they previously sold to you.

Keep in mind, though, that the biggest counterfeiter of all is your own central bank. Since the 2008 crisis, the Federal Reserve has created trillions of dollars out of thin air.

So your best insurance against even more fiat money counterfeiting is to own some physical gold. Just be sure you know who you're buying from and what you're getting.

Source :

Money Morning/The Money Map Report

©2012 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email:

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2015 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Biggest Debt Bomb in History