Saturday, September 29, 2012
Warning: Counterfeit Gold Bars Spotted in U.S.
Get your foil hats and stock your bunker, the conspiracy theorists scored a recent victory when it comes to gold. For quite some time now, many have speculated that the amount of gold the U.S. claims to hold is a sham. It is already very likely that gold prices were manipulated alongside LIBOR, but recent news has only added fuel to the fire. Last week, a counterfeit gold bar was discovered in the U.S., as a 10 ounce gold bar sold in Manhattan was shown to be nothing more than tungsten, essentially erasing a near $18,000 purchase. Shortly thereafter, 10 more counterfeit bars were discovered.
Tungsten costs roughly a dollar an ounce compared to gold which is hovering around $1,700 per ounce: just a slight difference in price. You may be asking yourself how someone could fall for such a scheme, but in reality it is very hard to spot the fakes. “What makes it so devious is a real gold bar is purchased with the serial numbers and papers, then it is hollowed out, the gold is sold, the tungsten is put in, then the bar is closed up. That is a sophisticated operation” writes Ti-Hua Chang. The bar was handled by a respected dealer, making the situation even more pressing, as it is extremely difficult to spot the fakes.
In fact, the only reason this fake was discovered was because the merchant heard about tungsten filled bars going around in Europe, so he decided to drill into some of his bars and spotted the grey metal. These counterfeit bars had been circulating overseas earlier this year but the fact that one has now been spotted in the U.S. hits home with many investors.
Now comes the question of how can you tell the difference in your physical gold if the merchant’s selling it can’t even tell the difference?