fake gold 3_0The advantage of gold as currency has always been that it was very difficult to counterfeit. From the time when Archimedes screamed “Eureka!” in his bathtub because he had found a way to test the gold content of his king’s crown, it was known that gold was much denser than any other element known to man.
So, a good scale was all what was needed to discover if something was real gold, or it just glittered like gold.
But today, things have changed: we have something that ancient gold counterfeiters couldn’t even dream of: tungsten with a density almost exactly the same as that of gold, and that makes density measurements nearly useless.
Since gold costs almost a thousand times more than tungsten (ca. $ 40,000 per kg against about $ 50 per kg) you can understand that there is a lot of incentive for mankind’s inherent nature to play a role here: with a chance to cheat, someone will.

 

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Since gold costs almost a thousand times more than tungsten (ca. $ 40,000 per kg against about $ 50 per kg) you can understand that there is a lot of incentive for the second law to play a role, here: with a chance to cheat, someone will.

I spent some time looking into this matter and I can tell you that, yes, there may be problems with gold counterfeiting with tungsten nowadays (in minor measure, also with silver). Not so bad as some people say, but not to be underestimated.

Stacks of gold bars stored in the bank of England (from the Daily Mail). An impressive display of wealth, with only one small problem: can we be completely sure that all that glitters is real gold?

Real gold? Are you sure? An examination of modern gold counterfeiting

by Ugo Bardi,

In life, I’ve discovered that there exist laws describing human behavior that seem to be as strong and inflexible as the laws of physics. One, that I call the “second law,” says that if there is a chance to cheat, someone will (the first law is the well known one, “there ain’t no such a thing as a free lunch). The second law of human behavior may hold in particular with the ancient human activity called “counterfeiting”, in particular of money and precious metals.

The advantage of gold as currency has always been that it was very difficult to counterfeit. From the time when Archimedes screamed “Eureka!” in his bathtub because he had found a way to test the gold content of his king’s crown, it was known that gold was much denser than anything else known. So, a good scale was all what was needed to discover if something was real gold, or it just glittered like gold.

But, today, things have changed: we have something that ancient gold counterfeiters couldn’t even dream of: tungsten with a density almost exactly the same as that of gold and that makes density measurements nearly useless. Since gold costs almost a thousand times more than tungsten (ca. $ 40,000 per kg against about $ 50 per kg) you can understand that there is a lot of incentive for the second law to play a role, here: with a chance to cheat, someone will.

I spent some time looking into this matter and I can tell you that, yes, there may be problems with gold counterfeiting with tungsten nowadays (in minor measure, also with silver). Not so bad as some people say, but not to be underestimated.  There follows what I found – it is based on some 30 years of experience in materials science, but it doesn’t claim to be the last word on the subject. If you know more details or you have different data, let me know. One of the things that I have learned in life (in addition to the second law of human behavior) is that you never finish learning.

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1. Counterfeiting gold bullion.

The term “bullion” applies to nearly 100% pure (or “100% fineness”) gold. Bullion ingots and bars come in different sizes: the typical kind traded between banks or governments comes in the “400 oz.” size (corresponding to 12.4 kg). One such bar is worth today around half a million dollars. Ordinary people won’t normally ever see one such bar, except in pictures. But gold bullion is commercialized in variable sizes and there exist much smaller ones, for instance ingots as small as just one gram. Dealers and goldsmiths also trade gold in the form of non standard bars or of foil, wire, and grains. In all cases, assaying methods are normally able to determine the fineness of the gold, but tricks with tungsten are possible and sometimes not easily detectable. There are two of these tricks, both are reported to have been actually used.

Gold plated tungsten bars and ingots. The start is with a pure tungsten bar. Such bars need special equipment to be made, but seem to be available on the market, although it seems that counterfeiters also use tungsten carbide (TiC) or “Tungsten Heavy Alloy” (WHA). These materials are almost as dense as pure tungsten, but easier to manufacture by powder sintering in the form of massive bars. Then, counterfeiters wrap the tungsten in gold foil 1-2 mm thick and then weld the two contacting surfaces by high temperature treatment. It is also necessary to treat the object in such a way to remove the “seam” were the edges of the wrapping foil touch each other, but that can be done with good welding skills. The final result is an object that is pure gold in the first few mm, but pure tungsten (perhaps carbide) below. The gold layer is thick enough that it can be stamped and punched as if it were solid gold all the way inside. Apparently, you can also buy these gold plated bars already made! The final result can mislead even experts if they limit themselves to visual examination and weighing. Also, the gold plating is thick enough that it makes the underlying tungsten undetectable to most common assaying methods such as X-ray fluorescence. There are only a few ways to detect the scam. Ultrasonic testing should work, although it may not be enough. Then, if the tungsten is in the form of carbide or WHA, it could be detected by a strong magnet, since both contain small amounts of magnetic metals (typically nickel), but the magnet would detect nothing if the tungsten is in pure metallic form. In practice, the only way to be sure of the scam is by drilling a hole in the object. That will immediately reveal the hard and dark colored tungsten inside. For a report of this counterfeiting method having been actually used, see here

Tungsten bars buried in gold ingots/bars. It is done by inserting one or more tungsten bars/billets in a gold ingot or bar. It can be done while the gold is being melted in a crucible, or it can be done drilling a hole in the gold ingot, hammering in the tungsten bar, then plugging the hole with a pure gold plug and welding everything in order to obtain a smooth surface. In this case, the tungsten may be only a fraction of the gold, nevertheless it provides a nice profit for the scammer who has succeeded, in a way, in the feat of transforming a vile metal into gold. This trick is very difficult to detect because even drilling a hole in the ingot doesn’t guarantee to find the foreign object inside. You need to slice the ingot salami style, or remelt it. However,ultrasonic examination will immediately detect that there is something wrong inside. For a report of this counterfeiting method having been used, see here.

2.  Counterfeited gold coins.

Gold coins are a popular form of gold trading, diffuse among private owners. Their weight may go between 1 oz to 1/10 oz. They are rarely pure gold because they would be too soft, more typically they contain slightly more than 90% gold in weight, that is they rate as “22 carats”.

There are standard and well known ways to counterfeit gold coins: the substrate can be made in brass or silver and then coated with a thin layer of gold – it can be done electrochemically. These fake coins are easily detected simply by weighing them: brass and silver are much less dense than gold. But, as I said before, tungsten has the same weight of pure gold, so if the substrate is in tungsten, weighing is useless to detect the scam. The problem, here, is how to manufacture a believable tungsten coin to be later coated with gold. Metallic tungsten is extremely hard – stamping a tungsten disk with an ordinary press simply wouldn’t work. Perhaps it could be done with special and expensive equipment and maybe by hot-forming tungsten carbide or WHA. Both methods would be very expensive and require remarkable expertise. However, assuming that it could be done, the tungsten coins could be electroplated with gold and would have the right weight for a real gold coin. The trick could be detected only by expensive equipment such as X-ray diffraction. At home, the scam could be detected only by scratching the surface with a file to see the dark color below. But that could also ruin a perfectly good coin.

Do such coins actually exist? I think not. I searched the Web but there is no hard evidence of real tungsten coins anywhere. Sure, there are web sites which purportedly sell you gold plated tungsten coins. But I just don’t believe that: what gives the game away, in my opinion, is that they only sell already plated coins. They don’t even show pictures of the coins before plating. If they had unplated tungsten coins, they should be happy to sell them to people who would then plate them at home – that’s the easy part (and possibly the illegal one) of the counterfeiting job. So, if you shell out the $1000 (the minimum that I found is needed) to buy the advertised coins, then you’ll probably receive just the ordinary kind of gold plated brass coins. Of course, you would complain. Sure, and then?

On the whole, I think that gold plated tungsten coins are just a legend and not something to be worried about; at least for the time being.

3. Fake Jewellery. 

Jewels come in a wide variety of shapes; rarely at grades higher than 18 carats (75% gold in weight). Since there are so many varieties and so few standards, it is with jewels that counterfeiters have traditionally found their favorite playground. There are zillions of ways to make fake gold jewels and counterfeiters are helped by the fact that often we have composite objects for which it is difficult to make precise density measurements. Nevertheless, in some cases, such as for a simple ring, it is possible to tell if a jewel is gold plated brass or silver simply by weighing it and measuring its density. The problem is, again, with a tungsten substrate. Weighing, in this case, is useless.

Here, I think scams could exist. Search in the Web for “tungsten jewelry” and you’ll find many companies selling you tungsten jewels, especially in the form of rings (actually, they are usually made in tungsten carbide). These jewels are real: they are shown in pictures and there are reports of people having bought them. Of course, there is nothing illegal in selling tungsten carbide rings and bracelets; although most of us would find them a little dull. The problem is that someone could plate them with gold and sell them as if they were pure gold. The weight would be the right one for 18 carats gold and even experts could be fooled. I wouldn’t be surprised if it were actually done (remember the second law of human behavior!). However, for the time being, there don’t seem to exist reports of people having been sold gold plated tungsten jewelry as it were real gold. It may be because it is still a new idea. In this case, we’ll see such reports appearing soon.

5. Silver counterfeiting

All what I was saying about gold can be said for silver as well. Traditionally, silver coins and bullion have been counterfeited using brass as substrate. But the scam is easily detected using a scale. So, in modern times, counterfeiters could use molybdenum rather than tungsten, as molybdenum (“moly”, for friends) has about the same density as silver. Also here, it is probably possible to make fake silver ingots, bars, coins and jewels with the same technologies described for gold. The problem for the counterfeiter is that the monetary gain is much smaller: silver is worth much less than gold, while moly still costs about 1/10 of silver by weight. So, it is not obvious that all the work and the effort to replace silver with moly is worthwhile. Since there are no reliable reports of this kind of scam being actually done, I think it must be very rare – if it exists at all. So far, silver seems to be relatively safe.

6 – Defending yourself from gold and silver scams.

The defense against the kind of scams we have been discussing here depends on who you are and on what kind of resources you have. If you are a bank, you probably already have expensive and sophisticated gold assaying equipment and you feel safe (but don’t forget the second law!). If you are a mafia boss, you know what to do with the cheaters who sold you counterfeited gold. If you are an ordinary person, however, you can’t afford sophisticated equipment and you don’t have henchmen who’ll send the cheater to sleep with the fishes. You have to do your best with simple equipment and good common sense. In this case, I think I can suggest the following:

1. Buy thin. Thin objects (such as coins or small ingots) are difficult (and probably impossible) to fake with tungsten and molybdenum. That will defend you from most of the modern scams we have been discussing here.

2. Learn how to measure density. It is easy (see, e.g., here) and all what you need is a good electronic scale that will cost you less than $ 50. You can also use scales specifically designed to test gold coins. These methods can’t detect tungsten, but they will defend you from old style scams (brass in the place of silver and silver in the place of gold). Note, however, that these measurements become difficult for very small objects, let’s say under 5 grams.

3. Get a strong magnet to test your gold – it is a good idea in particular for jewelry. You can buy extra-strong rare earth magnets for a few dollars over the Web. If your gold doesn’t stick to the magnet, that doesn’t necessarily mean it is real gold but if it does surely there is something badly wrong with it. This test should reveal scams done with steel and also with tungsten carbide or WHA, which contain magnetic elements such as nickel. (silver is a somewhat different matter, as it is slightly attracted by strong magnetic fields)

4. Never forget the second law of human behavior: “if there is a chance to cheat, someone will.”

7. Large scale counterfeiting

On the whole, it seems that there is little to be worried about for an ordinary person who buys small amounts of precious metals, especially if one takes some elementary precautions. However, this story leaves us with the impression that, with the advent of tungsten, gold has lost some of its glitter.

The problem is that the temptation of faking a large gold bar is strong: replacing a 300 or 400 oz bar with one in tungsten means making a few hundred thousand dollars with a relatively modest effort. And the scam is difficult to detect: if the bar rests in the vault of a bank or of a government facility, it may well stay there for decades before anyone will test it in ways that could detect the tungsten inside. Not surprisingly, it has been done; even at the level ofNational Banks. I have also reports from sources which I consider reliable in the gold industry telling me that the actual cases of tungsten scams are much more common than it would seem from what the media report. Yes, there are nice rules that should prevent such occurrences, such as the Gold Good Delivery standard. But all certifications are made by people, and people can be corrupted – especially when we are talking of millions of dollars. Remember the second law of human behavior: “if there is a chance to cheat, someone will”

Does that mean that, as some people said, the gold bars stored in Fort Knox are all in tungsten? Well, I think not, but pause just a moment to think: if they were fake, how would we know?

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SRSrocco:  Ugo Bardi has his own site the Cassandra Legacy which I recommend reading.  Also he has a new book coming out April 15, 2014 you may find interesting called EXTRACTED:

Extracted


  1. Silver may seem to be a less profitable to counterfeit, however, the game changer is THIRD PARTY GRADING!!!!!  When a coin is in a holder, its pretty difficult to test!  And if you can get $50 bucks (easily) for a piece of moly that cost .50 cents, well, that’s some profit some unscrupulous SOB might ponder…Holders are easily duplicated/counterfeited.
    And if the thought of a third-party grading holder being involved in fakes bothers a reader here, then my advice is to consider some other hobby.

    • Third party grading offers a false sense of security and in some cases ridiculous in concept.  It’s not difficult to open those “sealed” cases and swap out a coin.  And if you buy a coin you should always verify authenticity.  But, if the coin is in a case you’re probably not going to want to do that.  So, you’re open to be defrauded.  And I laugh at MS gold eagles being advertised for sale.  The entire run of gold eagles are uncirculated in pristine condition. Nothing special or rare there. A graded gold or silver eagle has no more real world value than an ungraded one.  But, many people get hoodwinked into buying MS gold eagles.  
       
      In the $20 gold market it’s all a matter of opinion on condition.  So, keep to the low end of the market and get your gold at the lowest premium possible.  When the market moves the biggest move percentage wise will be in your ungraded circulated material. 

  2. This concept for the most part is baffling. Especially gold for the money involved – it escapes me why any dealer worth his salt would test any gold he buys from a private citizen / non mint source BEFORE HE BUYS IT.
     
    We’ve all hear the stories of salted 400oz bars floating around in storage – and as I recall given the nature of that, and who has access to that gold, it sort of tells the tale about who would be behind it ( i.e. govt / bankster ).
     
     

  3. I have just registered on this site today asd I feel compelled to leave a comment in response to a highly missleading statement made in this article. The statement I refer to is, ‘Since there are no reliable reports of this kind of scam being actually done, I think it must be very rare – if it exists at all. So far, silver seems to be relatively safe’.

    Well, as a collector of fake Silver Bullion (yes I did say I collect fake silver bullion – there was bound to one person out there) I can assure you that you are being rather optimistic if you think Silver is ‘safe’ from the counterfeiter. It is actually very common indeed to copy quality Silver products.

    I have in my collection of ‘fake Silver’ some very high quality copies of products made by every major Silver Bullion producer around the world.

    I have copies of Silver Bullion coins from all mints except from the British Royal Mint (have not yet managed to track down a fake Britania). Some of the copies I have are of only mediocre quality, some are of very high quality. The most recent copies I have of the Mexican Libertad are amongst the best fake coins I have ever seen – in fact they are so good that when I recieved my first samples I had to take the strange action of testing my fakes to make sure I had not been sent the REAL thing by mistake!

    Most coins and bars I buy these days are superb, and many require very close examination to distinguish the fake from the real thing (ie they pass the neodymium magnet test, pass the scratch test, pass the basic weight test of 31 to 32 grams on the scale, pass the typeface and design accuracy test etc).

    I also have copies of many fake Bullion bars and ‘Art’ Bars ostensibly produced by every major supplier, such as the Nortwest Territorial Mint, Scottsdale, Apmex, Pan American Silver Corp, Englehard, Sunshine Minting, Stagecoach, etc, along with many other products not bearing a mint mark (ie just carrying the marks, ‘.999 one ounce fine Silver’).

    I have picked up fake coins and bars from Pawn Brokers, from Coin Shops, from Jewelley shops, and of course from eBay. Most of the coins and bars I buy were initially offered as genuine, until I have shown that they are fake (embarrasing for one or two coin dealers who were stung by high quality fakes).

    Fake silver has come a long way from the magnetic, thinly plated, course detailed, and underweight offerings of the past. As with all shiny and reflective metal things for sale remember ‘Caveat Emptor’, lest you become an unwitting collector of fake silver yourself.

  4. The Chinese did not melt and recast all the gold bars they received for exercise.  It would be fascinating to know how many of them contained tungsten and where those bars came from.
     
    As to the article:
     
    “So, a good scale was all what was needed to discover if something was real gold, or it just glittered like gold.”
     
    No, a good scale is not all that is needed.  One also needs the volume of the item in question and THAT was what Archimedes got so excited about.  He realized that one could determine the volume of an irregularly shaped object by the volume of water that it displaces.  Knowing that PLUS the scale weight allows one to calculate the density of an object.  While this doesn’t prove that something is gold vs. tungsten filled gold, that was not a problem in Archimedes’ day.  
     
    These days, a good ultrasonic tester will detect foreign substances inside a gold object because the speed of sound in metals varies considerably.  The sonogram (graphic presentation of ultrasound measuring data) that results from an impure bar vs. a pure one.  There are metals that have a sound velocity that is close to that of gold but their densities are much lower than gold.  The neat thing about ultrasonic testing is that it is not only very reliable but it is also non-destructive.
     

  5. “Stacks of gold bars stored in the bank of England (from the Daily Mail). An impressive display of wealth, with only one small problem: can we be completely sure that all that glitters is real gold?”
     
    No, we can’t and it’s really not any of our business, is it?  But the Brits should know.  Surely, they test every bar that comes to them via an ultrasonic tester.

  6. Get a 10X jewlers loop, and a scale. Study the counrterfits they are on the net. On Ase`s the sun ray`s are squared on the ends. Lady liberty`s face looks like it`s out of a comic book. On Silver dollars, the exterior dental molding has bubbles in it. Read up, mabey buy a fake and study it. There`s no other way. It`s why I like junk halves, quarters and dimes.

  7. I agree with Silverrrrr and Ugly Dog on the graded coins, there is a real problem with fake coins in NGC & PCGS holders coming out of china.  I would not trust buying a graded coin in a holder.
     
    Silver Dollar, somewhere on the Internet I saw a photograph of a Silver Eagle dated 1906!
    LOL.

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