This story is interesting. In Manhattan, a 10 oz gold bar turned out to be gold-plated tungsten.
It was a high-quality fake. Someone took a 10 oz gold bar. It was assayed with a serial number from a reputable source. Someone hollowed it out and filled it with tungsten.
Tungsten has the same density as gold. Gold-plated tungsten can be convincing fake gold.
For silver, an alloy of cheaper metals has the same density as silver. It’s easy to create fake silver coins.
As a casual investor, how do you prevent yourself from being cheated? Does anyone know a good way to detect gold-plated tungsten?
I don’t like acid tests, because that damages the coin.
This page had some interesting information, on how to detect gold-plated tungsten. It’s actually pretty hard. If you have a really sensitive magnetic field detector, that might work. He also mentions heat capacity, but that’s hard to measure without specialized equipment.
If you have a *REALLY* sensitive scale, you may be able to detect the specific gravity difference, between gold and tungsten.
Allegedly, if you have a lot of experience handling real gold, you learn how to detect fakes.
If you stick to small denomination coins (1 oz or less), there’s less risk of fake coins. A would-be counterfeiter has less profit, by faking small-denomination coins. However, if gold and silver start being widely used, fakes will be more common.
One of my agorist business ideas is “Start a gold/silver/FRN barter network.” If I do that, I’ll need a reliable way to detect fake coins.
Another possibility is to stick to platinum. It is nearly impossible to counterfeit platinum, because it is one of the densest metals. The only metals denser than platinum are also more expensive than platinum. A specific gravity test will *ALWAYS* detect fake platinum.
Another possibility is to stick with State-issued American Eagles. The penalty for counterfeiting those coins is more serious than the penalty for counterfeiting generic bullion. However, I shouldn’t place extra trust in State-issued coins. Also, American Eagles trade for a premium compared to generic bullion.
If you invest in physical gold and silver, counterfeit coins are a serious risk. It’d rather take the risk of counterfeit coins, than the sure loss from investing in the State financial system. I should learn how to detect fake gold and silver. If I start a gold/silver/FRN barter network, I’ll need to learn how to detect counterfeit coins.