How do you identify fake gold when buying gold for investing or even gold jewelry? Our guide tells you the tests, and what to watch out for to avoid being ripped off.
Gold is one of the most popular investment opportunities when it comes to crisis preparedness. But not everything that glitters is gold – in the truest sense of the word. Usually less valuable metals and alloys such as tungsten, tombac or brass are used, which are coated with a thin layer of gold. As a rule, bars are counterfeited more often than coins, since minting the wrong coins is considered to be too complex and counterfeit coins are relatively easy to recognize for experts. The situation is different with counterfeit bars, which are often difficult to identify as such.
Fundamentally, the counterfeiting of gold is not particularly complex and is often carried out, especially with large bars. Coins are more difficult to counterfeit and less profitable, which is why the counterfeiters concentrate on gold bars. Instead of an ingot made entirely of gold, an ingot made of cheaper metals is coated with a thin layer of gold and sold as gold. The biggest problem is that the fake looks deceptively real, since the surface is actually made of gold. For example, many investors are likely to own “wrong” gold bars, but are not aware of it — so it makes sense to check everything out to identify fake gold and not get caught out by it.
Gold fakes in the past
Gold has always fascinated people. The ancient kings and emperors already valued the precious metal, which is why it quickly became a means of payment. But this also attracted fraudsters, who mostly made gold alloys in order to be able to produce more coins from a smaller amount of gold. To date, these methods have become increasingly sophisticated, and false gold is becoming increasingly difficult to identify.
A scam from New York in 2012 was particularly spectacular when an investor bought gold bars worth over $ 100,000. In retrospect, however, it turned out that these were by no means pure gold bars. Because after the owner had drilled out an ingot, he came across a gray metal – tungsten. This was only covered with a fine layer of gold. The bars were falsified very professionally and even had a serial number and the stamp of a renowned manufacturer.
A case in Germany caused a sensation in 2015. At that time, the Berlin Economic and Financial Foundation cheated many small investors with fake gold bars. By the way, not only gold, but also silver, platinum and palladium can be counterfeited.
In the last few years, fake bars worth at least $50 million stamped with supposedly authentic Swiss refinery logos have been discovered by Switzerland’s leading gold refiners and also at JPMorgan Chase & Co., one of the world’s top bullion market banks.
How can you identify fake gold?
Over 2,000 years ago, it was the Greek mathematician Archimedes who invented the first reliable method for exposing counterfeit gold. He should find out if his king’s crown was made of real gold. For a long time he racked his brains over how he could accomplish this task without destroying the crown. He only found the answer to the riddle when he sat down in a bathtub and the water ran over the edge. He realized that the volume of his body was displacing a certain amount of water. When he placed the crown and then an equally heavy gold bar in a vessel with water, the crown displaced more water and had to have a larger volume with the same weight. So it was not pure gold.
This water displacement method can still be used today to identify fake gold and alloys that differ in density from gold. Tungsten, however, has a density similar to that of precious metals and is therefore more difficult to identify.
You should pay attention to the classic features that are imprinted on a bar. These are
- Stamp with the name of the manufacturer
- Note about the metal (gold, fine gold, fine gold, pure gold or similar)
- Indication of the degree of fineness
Check stamped numbers on jewelry for carat value
These marks will vary according to the country the jewelry was made and purchased in, but if you see letters like RG (rolled gold), GP (gold plate) or GEP (gold electroplate), you know you are looking at something with just a thin coating of gold.
To test a coin, piece of jewelry or even a small bar, bite down on it. Fake gold will not dent at all, but real gold — especially the higher grades – is soft enough that your teeth will leave a mark. Just don’t bite so hard that you end up having to see the dentist!
Look for discoloration
We don’t mean a little bit of dullness — that’s perfectly normal. But any green or black spots on the surface of the metal indicate that it is fake gold. Pay particular attention to any edges or clasps on jewelry as this is often where the discoloration appears first.
Find an unglazed ceramic plate or surface (you have to be warned that this will scratch your item, however). Draw the item in a line across the ceramic surface… it will leave a slight trail of metal. If the trail is black then it is fake gold, but if it is the proper gold colour then it is real.
The ‘hand’ test
Hold the item in your hand and pay attention to the weight. Real gold is dense and heavy, but fake gold will feel lighter.
Check documentation and security features
In addition, most bars are delivered with a certificate of authenticity. If these features are not available, one should be puzzled. However, if they are available, this does not guarantee a pure gold bar. That is why some manufacturers have come up with special security features. The Kinebar gold bar, for example, has a kind of embossed hologram, which is located on the back of the bar and is very difficult to counterfeit.
Test with a magnet
The magnetic sample is often enough for the gold jewelry at home. If the jewelry is magnetic, it is not pure gold. If you really want to be on the safe side, you have to bring your gold products to an expert. This can detect counterfeit gold using modern methods. An effective method is ultrasound measurement. Because the speed of sound differs significantly for gold and other metals as well as for alloys.
The density of the respective ingot can be determined very precisely using ultrasound devices and other tests. So it can then be undoubtedly determined whether it is a fake or real gold. When purchasing, you can also explicitly insist on a test with such a device.
Expose fraudsters already when buying
Basically, it is important to exercise caution when buying gold and only to buy gold from reputable dealers or banks. There are always fraudsters on the Internet who lure with tempting offers. A certified gold trader, on the other hand, can guarantee the authenticity of his products. Always compare gold prices from different sources in advance. A reputable gold trader generally never sells his products at prices that are significantly below the current prices. If you want to buy a gold item from a dealer who you don’t trust 100 percent, you can get the opinion of a third party and have the product checked by a jeweler. A fraudster will not allow you to do this because he must fear that his cover will be exposed and a criminal complaint will be filed, but a genuine seller will be happy for you to have the product checked.