Counterfeit products exist in almost all industries, and precious metals are no exception.
Go to any online marketplace such as eBay and you will find lots of people selling gold and silver for silly prices. These are a good investment for any prepper but the problem is that most of those items are fake. They are, in most cases, tungsten plated with a thin layer of gold.
Even those that are not new to buying gold and silver can get duped, it isn’t only the first-time buyers.
The good news for us is that with a few simple steps and a bit of knowledge, it is relatively easy to separate the real from the fake.
Gold is known as a heavy metal due to its high density.
If purchasing face-to-face with the gold dealer, make sure to take a digital jewelers scale along with you. This should also be done if purchasing from stores.
If you buy the most popular 24-karat, one-ounce sovereign coins, you will notice that they should feel dense and heavy—and weigh exactly one troy ounce.
There are gold coins that are made of 22-karat gold (.9167 fine) and weigh more than one troy ounce (they contain one ounce of pure gold with some alloys to increase strength.
Remember that precious metals are weighed in troy ounces. (A troy ounce is 31.1 grams).
If the coin is lighter or heavier than its actual weight, it’s a red flag.
Government-minted bullion coins have standard dimensions which can be found on an official mint site. If the coin is too large or too thick, it’s almost certain the coin is a fake product.
Fake gold coins are usually somewhat larger or thicker than the real deal, so they are heavier and less detectable as fakes.
So always bring a set of calipers to a local shop for measuring.
The Ping Test
Authentic gold coins will chime when they are struck and the difference is notable when compared with base metals which will sound duller and their ring will be shorter.
To do the ping test with your own gold coins, try balancing the coin on your fingertip and strike it with another coin.
If it sounds too good to be true, it probably is
If you are purchasing from a trustworthy gold bullion dealer, they will sell gold bullion at 1.5% to 10% (or more) over the gold spot price.
This accounts for the spot price, refining and minting premium, as well as transportation costs, plus dealer overhead and profit.
If the dealer is selling gold at or below the spot price, they either have hidden fees to make up for losses or are selling fake gold.
Is it Magnetic?
One easy method of determining whether a gold coin is real is to see if it is magnetic or not as gold is non-magnetic. Placing a strong magnet on a coin and tipping it to watch whether the magnet slides off, as it should, or sticks, like it would to a counterfeit.
Any magnet will work for this method. You can’t use this method on its own, it must be used in conjunction with other methods as some base metals that are used in counterfeiting are also non-magnetic.
The Acid Test
You can purchase gold acid testing kits pretty cheaply and will allow you to check if your gold is genuine by looking out for a color change in the acid.
This is unlikely to reduce the value of your gold coins as they are valued for their metal content, not their color.
The best defense against fake bullion is to buy from reputable dealers only.
Instead of investing in gold coins and bars, consider silver instead as no metal shares a similar density to silver, making it even more difficult to make good counterfeits than with gold.