
The problem of fake gold bars (2012) - MBCook
http://blogs.reuters.com/felix-salmon/2012/03/25/the-problem-of-fake-gold-bars/
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jessaustin
_Update: I forgot that gold is actually used, once in a while, to make things
like jewels — which means that bars are melted down pretty frequently. If
there was_ [sic] _a significant number of salted bars out there, we’d know
about it, since you’d notice when one of them got melted down. Which isn’t to
say that there are no salted bars at all, but it certainly does seem to imply
that there’s_ [sic] _nowhere near 1.3 million of them._

~~~
analog31
That is, unless it's the owners of gold reserves who are salting their own
bars to inflate their apparent net worth.

I wonder if the acoustical properties of a fake bar would be easy to
distinguish from solid gold.

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SapphireSun
Just do what Archimedes suggested. ;)

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analog31
What, run up and down the street naked, yelling Eureka?

Actually, I'm agreed that you could measure the density, but somebody could
fiddle with the density too by adding just a touch of this or that to bring
everything up to the right weight.

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diroussel
Where 'this or that' can only be something more dense than gold, which are not
cheap:
[http://m.wolframalpha.com/input/?i=10+densest+elements](http://m.wolframalpha.com/input/?i=10+densest+elements)

~~~
analog31
Aha, I didn't look up the densities.

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rdtsc
Say you found your $100M worth of gold is salted. I am guessing you wouldn't
advertise it in public too eagerly. You'd probably want to offload it and turn
it into some other asset as soon as possible and make it someone else's
problem.

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code_duck
I suppose that depends on your ethics… Though most people's ethics would be
tested when it comes to $100 million. Hopefully, anyone discovering fake gold
would file a lawsuit or report the fraud to law enforcement.

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TorKlingberg
Selling a gold bar you know is fake would be very unethical indeed. However I
could imagine people would avoid testing gold they already own, as nothing
good can come of it.

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packetized
"If you can weigh the bar accurately, then you can test for purity by
essentially dropping it in a bucket of water and seeing how much the water
level rises: a gold-covered tungsten bar will displace more water than a pure
gold bar. "

I'm afraid that either myself or the author doesn't fully understand fluid
displacement.

~~~
gatehouse
Gold density is 19.30 g/cm3, Tungsten is 19.25.

Given two gold bars, one adulterated with Tungsten, and one not, either the
weight will differ or the volume will differ. So, given equal weights (i.e.
standard 400oz bars), you can check the displacement to establish purity.

If you use a container that is filled up to a spout, and you measure the
displaced water by collecting it in a measuring cup, you can just directly
calculate density, and then compare it to gold.

~~~
logicallee
you can't just check density like that, come on. platinum (which apparently
trades around the same price as gold) - has a density of 21.45 [1] which more
than compensates. If you want 100 grams of a tungsten-platinum mix to match
the weight/volume of 100 grams of gold, this is how many grams you get to use
of tungsten:

19.3 * 100 = 19.25 * x + 21.4(100-x)

gold is left, mix is right (a sum of the tungsten and platinum parts). I solve
for 100 grams because voila, it's now a percentage. That solves to x = 97.7273
(you get to use 97.7273 grams of tungsten) or you just need 2.2727% platinum.
(which recall costs about the same as gold.) so if this were a great test
people could just use an alloy, which apparently exist:

[https://www.google.com/search?q=tungsten+platinum+alloy](https://www.google.com/search?q=tungsten+platinum+alloy)

and target the exact same density as gold. tungsten alone seems close enough
for them, at least, according to the author.

[1]
[http://en.wikipedia.org/wiki/Platinum](http://en.wikipedia.org/wiki/Platinum)

~~~
gatehouse
Yeah this looks viable. This would make the best fake bar. I don't think the
metal even need to be alloyed, you can just pour in one first, then the other.

~~~
logicallee
I didn't mean it to be a viable suggestion - I don't think it is one. If
you're testing density to within 2.7% you are doing other tests (suggested
elsewhere by others in this thread). All I was saying is that although I do
think the author is wrong (there is no problem of fake gold bars), the
existence of a simple density test isn't why...

~~~
gatehouse
yeah, this machine seems to be able to do it:
[http://www.ebay.ca/itm/GoldXpert-SDD-Portable-Countertop-
XRF...](http://www.ebay.ca/itm/GoldXpert-SDD-Portable-Countertop-XRF-
Analyser-/201085598918)

~~~
jamessb
The first sentence of the original article states that XRF won't tell you if
the core of the bar has been replaced with a different metal: _" You don’t
need to be a conspiracy theorist to find this worrying: a 1kg gold bar,
certified as 99.98% pure by XRF (X-ray fluorescence) tests, turns out to have
been drilled out and largely replaced with tungsten"_

The article also says that a micro-ohm meter can detect such replacement.

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code_duck
This article would be more useful if it contained any sort of facts about or
reasonable estimate of what the frequency of fake gold bars may be.

As a glass flameworker, I and my colleagues buy gold, cut it up, stick it on
rods of glass, and put it on the flame to deposit gold vapor onto glass. We
would notice fake gold right away, but I haven't heard of that happening.

(Though, the typical flameworker doesn't buy whole 1kg gold bars!)

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Htsthbjig
Well, banks are not stupid, and it is cheap for them to certify gold bars in
quantity.

There are certification authorities that do exactly that. Here in Spain you
can hire them, and they will melt the gold in front of you and use expensive
instrumental to know how much gold a gold bar has.

We also have the concept of "notary" that is a person whose job is to certify
something by law. They are trustworthy.

It is individuals who should be afraid of being tricked. But you have at your
disposal cheap microbalances, micro ohm meters(I made myself one for like
USD30), 3d scanners(to calculate the volume as using water is tricky because
surface tension of water), quartz transducers to measure speed of sound.

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logn
The bigger worry should be the paper market. It's speculated that governments
buying huge quantities of physical gold will sell non-existent gold on paper
to keep the price of gold stable during their purchase.

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chebucto
This same problem happened to the Ethiopian central bank. One batch, which had
been bought from a trader, was discovered to be fake fairly quickly; another
batch of faked gold, seized from smugglers, had been in their vaults for
years.

[http://news.bbc.co.uk/2/hi/africa/7294665.stm](http://news.bbc.co.uk/2/hi/africa/7294665.stm)

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damian2000
One option is to only buy directly from a government owned mint that pours its
own bars. e.g.
[http://www.perthmint.com.au/investment_bullion_bars_coins_ba...](http://www.perthmint.com.au/investment_bullion_bars_coins_barspage.aspx)

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PhantomGremlin
Or just buy gold coins. Buy some Krugerrands, some Maple Leafs, some Double
Eagles, etc. Yes they can also be fake, but what are the odds that you'll buy
fakes of all those different coins?

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chrisbennet
I'd be more worried that your gold bars weren't actually in your bankers vault
anymore. Look what happened when Germany tried to repatriate their gold from
the U.S. Federal Reserve.

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brazzy
They didn't "try", they are doing it, partially, piecemeal.

Which may be because the Fed didn't actually have all that gold available,
nicely separate in a vault labelled "Germany", but even if that is true, the
case is rather more complex than just "The Fed embezzled the gold that Germany
gave them for safekeeping". Because Germany never _gave_ that gold - they
never actually had it. It's in fact the German export surpluses from the time
before the USA went off the gold standard.

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alkimie2
Ah! An area where bitcoin is superior to gold!

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cgtyoder
This is from 2012.

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cgtyoder
Seriously - downvoted?

