There’s nothing new about counterfeit gold. The usual technique is to create a tungsten bar or round (because tungsten is very close in weight to gold, 19.250 grams per cubic centimeter for tungsten compared with 19.284 grams per cubic centimeter for gold) and then coat the tungsten with gold and apply whatever stamps or etchings needed to match a real gold coin or bar. From the outside, it appears to be solid gold but on the inside it’s not.
There are ways to detect these counterfeits that involve highly precise scales, drilling through the core, magnetic scales, a “ping” test (judging by the sound) and other methods. One problem is that applying some of these tests to real gold can damage the bullion and hurt the resale value. Still, the tests are effective.
Now comes a new kind of counterfeit as described in this article. The new counterfeits are actually pure gold. The fake part involves the stamp on the bar. These pure gold counterfeits are made in refineries in China but are stamped with the name and logo of more prestigious refineries in Switzerland such as PAMP, Argor-Heraeus, Metalor or Valcambi.
Several of these “solid gold” fakes have turned up in the vaults of J.P. Morgan bank recently. The purpose of such counterfeiting is not to fake the gold (since the bars are solid gold) but rather to hide the provenance.
Major refiners are committed to using gold only from conflict-free zones and not from mines where slave labor or harsh working conditions are found. The Chinese refiners don’t care. They buy gold from the least reputable sources and then try to hide the source by faking the refinery name on the bar.
While these fakes are solid gold, the purity of the gold may be slightly lower than that produced by the top refineries. The new world standard is 99.99% pure (so-called “four nines”) whereas these fakes may be only 99.0% pure or lower. That’s still high-quality gold, but not the purity standard expected by buyers and sellers in the legitimate market.
The way to avoid fakes is easy: Just restrict your purchases to the actual top refineries or to highly reputable dealers and mints. In all other cases, it’s caveat emptor.
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