The gold bullion and precious metal industry has struggled for a while now to control the flow of counterfeit gold coins and bars. The sad reality is that scam artists are out there making fake gold coins and fake gold bars and investors today need to be savvy if they want to avoid adding any counterfeit product to their collections.
In the fall-out from the 2008 financial crisis, many people turned to the precious metal industry as a safer place to invest their capital. Suddenly, gold bullion investment became more popular and counterfeiters have taken advantage.
While there is no denying the risk of buying counterfeit gold is on the rise, there are some relatively simple ways you can protect yourself from falling foul of the fraudsters. Our experts have pulled some top tips together to help you check for counterfeit products and ensure you’re only buying the genuine article.
Where does counterfeit gold come from?
Most of the counterfeit gold that is available to purchase online is thought to come from Chinese factories that are dedicated to producing thousands of coins and gold bars on a monthly basis. There is good reason to suspect the region due to the fact that these businesses are legal in China and they can even list their wares on retail sites such as Alibaba without fear of recrimination from the Chinese authorities. They often advertise their counterfeit gold bullion as ‘gold-plated tungsten’ and are selling both coins and bars on the open market.
This is just one end of the counterfeit gold bullion trade, the other is the retailer or seller, and many of these unscrupulous traders will use unverified websites such as Craigslist and eBay to flog their dodgy goods to unsuspecting gold bullion investors or collectors. It’s important to understand the sheer volume of fakes being pushed with the mass production of fake gold bullion made from inferior metals.
What is counterfeit gold?
Counterfeit gold bullion coins and bars are designed to mimic their genuine counterparts that have been authentically minted and released from original mints from all over the world. These include The Royal Australian Mint, The Royal Canadian Mint, The Royal Mint and The South African Mint, which are just some that have been affected by the counterfeiting trade.
Counterfeiters produce their counterfeit gold bullion coins and fake gold bars to sell to unsuspecting investors using several methods to copy the originals. In most cases, the amount of gold that has been used in these counterfeit gold coins and gold bars does not match the amount found in the originals. This is often achieved by using an inferior base metal with layered gold on top to create the desired appearance that has fooled so many investors.
What’s even more shocking is that counterfeit bullion factories have even discovered a way to stamp unique serial numbers on to their products, whereas in the past each product was stamped with the same serial number, making it easier to spot a fake.
Investors who buy gold bullion through a reputable supplier can rest assured that they can reduce the risk of purchasing a counterfeit product. At The Gold Bullion Co. we take certain measures to ensure that our products have passed strict verification checks, such as being passed through an X-ray fluorescence analyser and checking that they have been officially certified.
If you are concerned that you have inadvertently purchased counterfeit gold bullion, then it’s a good idea to get your bullion examined by an industry professional. Although we are unable to offer this specific service to our clients’ current stock, knowing that we’ve carried out the professional checks when you buy new items from us does ensure that you never have to go through the worry in the first place.
How can you detect counterfeit gold?
The question of course is, how would you know when a fake passes through your hands? Well, we don’t want to give away all of our secrets but here is a sneak peek.
As technology improves, as well as the experience and knowledge of counterfeiters, it’s becoming even harder for investors and professionals alike to determine originals from the official mints compared to the fakes.
Until fairly recently, it was a lot easier for gold bullion industry experts to find counterfeit gold coins and bars. This is because they could easily judge a fake by its packaging, which often used dodgy blister-packs, or sometimes arrived completely unsealed without any packaging at all. The appearance of the gold coin or bar itself was also a lot easier to compare against the original.
What’s changed is that the counterfeiters have become wise to this and are now taking a lot more care and attention over their fakes, which are becoming even harder for even the experts to identify, let alone the average investor who isn’t handling large quantities of gold bullion on a daily basis.
Counterfeiters are now even using the same production methods as the original mints, and the end result is packaging that is almost identical to the original gold bullion product. We’re now at the stage where almost any precious metal is at risk of being counterfeited by these sophisticated factories.
There are some basic checks that gold bullion investors can make at home to reduce the chances of falling victim to counterfeiters.
Most importantly, the best advice we can offer is to only purchase gold bullion coins and bars through accredited traders such as The Gold Bullion Co. An established and reputable company that handles large quantities of gold bullion products every day is far less likely to leave you holding a fake. This is mostly because these handlers will know what’s what when it comes to finding a fake. These companies are also much closer to the original mints and receive their products directly from them, ensuring they are viable and legitimate goods.
If you’re really tempted to go off-piste, then you must also make note of the price of gold bullion that is being sold online. If you feel that the price is too good to believe, then the odds are that this is correct and you should stay well away from these sellers. Gold bullion is always sold at the market gold price as a minimum. Many fraudsters advertise their counterfeit gold bullion at very low prices, which should be the first red flag to any investor.
If you see gold bullion privately listed for sale on popular websites such as eBay or Craigslist, then you should be extremely cautious. It’s recommended for good measure that you avoid these sites altogether when sourcing your precious metal investments as fraudsters typically use these platforms to sell their counterfeit gold bullion bars and coins. So make sure you only purchase through credible websites to ensure the quality of your gold bullion. In many cases by the time you realise your purchase is a fake, the original seller will be completely out of contact and probably many miles away, so it’ll be near impossible to trace them for a refund.
Gold bar counterfeit detection
In most cases, counterfeiters use inferior metals to re-create gold bullion bars in their factories and one common way of doing so is to fill the inside of the bar with tungsten, which alters the weight when compared to an original gold bar. Make sure you measure the weight and dimension of any suspect gold bar against an original one to check that it’s not a counterfeit copy.
Original gold bullion bars will have various engravings and markings from the official mint producer. If you are a dab-hand at gold bullion investment then you will know the various producers and their markings, so you can quickly tell if you have a counterfeit gold bar on your hands. If there are abnormalities, or variations in the size and dimensions compared to your original gold bullion bars, then this is a clear sign that you could have mistakenly bought a counterfeit.
Another verification method is to see if your gold bar is magnetic with a rare-earth magnet. If your suspect gold bar is reading as magnetic, then this is a sign that it could be a counterfeit because gold isn’t a magnetic metal. However, this test isn’t always 100 per cent accurate because there are some counterfeit metals that can pass this test.
You can avoid counterfeit gold by purchasing gold bullion bars from the Swiss brand PAMP, as they’ve developed a unique system to verify their products that is currently revolutionising the gold bullion industry. Known as Veriscan technology, it’s quickly out-foxing counterfeiters due to the complex technology it uses. These products are marked with the VERISCAN logo, to ensure it’s an original – so this is something you should definitely look out for to give you some peace of mind.
When you download PAMP’s PC software or the Veriscan iPhone app, you can use this as a tool alongside any document scanner to analyse the trade mark PAMP bullion-positioning frame, so that you can quickly check the authenticity of your Veriscan gold bullion bar.
Gold coin counterfeit detection
Sadly, the same is true with coins; if you’re investing in gold bullion coins, it’s becoming more and more difficult to avoid mistakenly purchasing a counterfeit. Fake gold bullion coins are being produced with such expert care that it’s easier than ever to fall foul of the scammers.
As with gold bullion bars, you will need to ensure that you check any packaging to see if it feels like rubber or if you can see any glue marks when you open the package. It’s a good idea to try to fit a suspect coin into packaging you know to be an original from an authentic coin, to see if the dimensions are the same. If you notice anything amiss during these checks, then you may have bought a counterfeit coin.
One of the advantages of using reputable traders like The Gold Bullion Co, is that we can identify original packaging very quickly thanks to the high frequency with which we receive shipments directly from the mints themselves. Our team are able to assess certain properties of the coin such as the weight and design to help them determine the authenticity of just about any given coin.
If you pay close attention to the overall quality and condition of your suspect gold bullion coin compared to an original, this can also help you spot some important differences that might present themselves. Areas to take note of are the diameter, edge lettering, weight, surface imperfections or thickness, any significant differences here will likely mean that you’ve been sold a fake.
Counterfeit gold coins, similar to counterfeit gold bars, will have been made using inferior metals like zinc, copper; steel and tungsten core too, with gold used on top. Most counterfeit coins have a gold amount which is less than 0.03mm, and the dimensions will usually not be the same as original gold coins.
How to avoid buying counterfeit gold?
So there you have it; it’s a minefield out there at the moment. One of the few sure-fire ways to avoid purchasing a fake gold coin or fake gold bar is to only go through accredited companies like The Gold Bullion Co. We have the experience and the expertise to spot a fake gold bullion coin or bar and we’ll take care to keep them away from our customers at all costs. Every item that is listed on our website has passed rigorous verification checks to ensure that they are original.
Browse our genuine gold coins and gold bars today.
