Fake Gold

Source: kingworldnews.com

Fake gold is in the news again, is it a harbinger of the future of the gold price. With gold prices trading more or less sideways since 2013 and growing reports that precious metals are going to be skyrocketing. Are they creating a supply of fake gold to unload when the demand surges? This is purely speculation on my part but it seems to fit.

A few years ago an Australian news team visited a gold factory in China. They filmed the manufacturing of fake gold bars and coins. In 2012, there was reports of tungsten found in gold bars which were sold by a reputable metals dealer. The price of an ounce of gold was about $1,700 when these scams were discovered.

Source: businessinsider.com

The biggest scare is that experts were unable to detect the forgery. If the experts can't detect the fake coin or bar, how is the common metals buyer going to know. Some companies tout that they are reliable and have been in business for many years, but the caveat with this is that people that bought the fake gold back in 2012 purchased their metals from reputable dealers.

As you can see from the fake gold photos, non-destructive tests will probably not work. The fake gold was found to have tungsten seeded inside of a real gold shell, tungsten has similar chemical properties to gold so weighing the metal will not detect the fake. Because the outer shell is gold, acid tests will not work. The markings were so well copied that experts were fooled.