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Thread: Gold: Testing for fake bars

  1. #1
    Join Date
    Oct 2008

    Gold: Testing for fake bars

    Safeguards can spot fake gold bars

    Submitted by cpowell on Sun, 2012-09-23 18:30. Section: Daily Dispatches2:15p ET Sunday, September 23, 2012
    Dear Friend of GATA and Gold:
    With gold-plated tungsten bars making another appearance this week, (, it's time to call attention again to the safeguards used by the best gold dealers to avoid getting cheated and to avoid cheating their customers.
    In March the Perth Mint's Bron Suchecki wrote about these safeguards, particularly ultrasonic testing, in an essay GATA reported about:
    Suchecki's essay remains posted at the Perth Mint's Internet site here:
    GoldMoney's standard includes ultrasonic testing, which is described in both text and a video here:
    Jim Sinclair notes that stories about fake bars could be used as disinformation to discourage gold investors. All the more reason to refuse to be discouraged and to be informed about your vendor.
    CHRIS POWELL, Secretary/Treasurer
    Gold Anti-Trust Action Committee Inc


  2. #2
    Join Date
    Oct 2008
    Bron Suchecki: Fake bars -- the facts

    Submitted by cpowell on Mon, 2012-03-26 17:55. Section: Daily Dispatches1:55p ET Monday, March 25, 2012

    Dear Friend of GATA and Gold:

    In an essay headlined "Fake Bars -- The Facts," Bron Suchecki of the Perth Mint today explains why tungsten-filled and other counterfeit gold bars like the one reported the other day by ABC Bullion are probably exceedingly rare and how conscientious dealers can and do protect against them. Suchecki writes that the Perth Mint melts and recasts every non-Perth Mint bar and coin it purchases. He also calls attention to the ultrasonic testing done by GoldMoney on the gold bars it purchases.

    Of course GATA's main concern about gold fakery doesn't involve tungsten-laced gold but rather oversubscribed or effectively invisible gold, but that's another issue.

    Suchecki's essay is posted at the Perth Mint's Internet site here:

    CHRIS POWELL, Secretary/Treasurer
    Gold Anti-Trust Action Committee Inc.


  3. #3
    Join Date
    Oct 2008
    Fake Bars - The Facts

    March 26 2012

    Posted By Bron Suchecki

    On the weekend the gold blogosphere picked up on an ABC Bullion blog post about a gold bar cored with five tungsten rods, including Zero Hedge, Reuters, Screwtape Files, Bullion Baron, and Jo Nova.

    The ABC Bullion blog was based on an email from MKS/PAMP sent to their distributors about a fake bar that a UK scrap dealer had received. The dealer thought the bar was suspicious due to a weight discrepancy and as a result they cut it in half, revealing five tungsten rods inside.

    Typically, Zero Hedge over play the significance of the story with this statement: “So two documented incidents in two years: isolated? Or indication of the same phenomonenon of precious metal debasement that marked the declining phase of the Roman empire.” Other bloggers, such as Felix Salmon of Reuters, have been quick to speculate that such fakes may be common and present a “serious tail risk for anybody in the physical-gold market.”

    In the experience of The Perth Mint, such fakes are a rare occurrence. In the 20 years our Refinery Manager has been working at the Mint, he has never seen a fake bar come through our operations. If investors buy coins and bars made by reputable refiners and mints and from a reputable dealer they are highly unlikely to be sold fakes.

    Reputable dealers are familiar with how the common brand name bars and coins should look and thus fakes are unlikely to be resold. Note that the dealer referred to in the ABC Bullion story suspected the bar and cut it before it even reached the refinery.

    As to the frequency of fakes, note that the previous “incident” that Zero Hedge referred to was this post of January 2010. As I pointed out in on my personal blog at the time, the Argor Heraeus video showed a fake bar received more than ten years prior. So sorry Zero Hedge, this is not two incidents in two years. Argor Heraeus said that “counterfeit bars are extremely rare, our colleagues from the foundry cannot recall a single instance in the last years in which such a bar was delivered to Heraeus for processing.” This agrees with The Perth Mint’s experience.

    In the retail market turnover of physical product is relatively high. This is because retail investors do tend to exhibit herding behaviour, which means when there is selling it usually overwhelms any retail buying demand at that point in time. The end result is that in a net selling situation dealers do not sit on gold due to the high holding costs and uncertainty as to when buying demand will return, so they liquidate that net selling excess back to refiners, where it is melted.

    Even in the professional market, which deals in 400oz bars, there is a fair bit of turnover. While central bank holdings are quite stable, large bars held by private investors are traded and ownership changes often. As a result, there is a good chance a bar will eventually be melted for use by a jeweller, mint or refiner and as such there is a high probability of any fakes being caught out.

    In the case of The Perth Mint, we melt every non Perth Mint bar and coin we buy back. We also melt a fair number of our own coins and bars if they are too old or damaged to enable resale. The point is that with such turnover of physical, the lack of fakes appearing in our and Heraeus’ operations indicates to us that fakes are few and far between.

    With regard to identification of fakes, the most reliable non destructive testing method is ultrasonic and would easily show any insertions. XRF and other tests generally do not penetrate very far into the surface of a bar, so are only good for testing plated bars. This link provides an insight into the sort of testing performed at refineries and for those interested in the technical aspects here is a quote from KK&S Instruments:

    “The 1090 Flaw Detector allows you to look into the Bar for voids/defects as well as UT velocity which is determined the products elastic modulus i.e Tungsten Velocity is 5183-5460m/sec and Gold is 3,240m/sec. For example if you calibrate for Au then the testing Tungsten bar of the same thickness, the UT thickness would read approximately half the actual because of the speeding-up of the sound through the Tungsten.”

    GoldMoney also has a good video on the ultrasonic testing they perform on their bars. Interestingly, they only found ten bars out of 1,377 with “inconclusive scans were identified but assays of these bars confirmed they contained the gold content stamped on the bar.” [link] These bars are 400oz professional market bars and is yet more proof that fakes are not common.

    Investors buying recognised brands from trustworthy dealers should not have any cause for concern. For those looking for more information on the various brands and bars and coins available, and what they should look like and their specifications, this website is a good reference site to bookmark.

  4. #4
    Join Date
    Oct 2008
    The goldmoney standard


    Quality and security of customer assets have top priority at GoldMoney. You need to be assured that the metals you buy with us are 100% yours and only of the highest quality. To address both needs we have developed the GoldMoney Standard, which is based on ultrasound bar testing and independent, third party audits.

    Digital Hallmark

    Between October 2010 and March 2011 we conducted ultrasonic inspection to verify that all customers' gold bars were free of foreign materials and defects. Any bar that failed the ultrasound test was melted down, assayed and then recast into a new bar. Only ten of the 1,377 stored gold bars failed the ultrasound test and were recast to ensure they meet the requirements of the London Good Delivery standard. As of April 2011, we are scanning all new gold bars we acquire on behalf of our customers.

    The quality test is performed using an ultrasound scanning device, developed by General Electric Inspection Technologies (GE). The test is carried out directly within our vaults. It is the same technology used to assure personal safety in the medical and aviation industries.

    Once we have tested the gold bars using our ultrasound scanning devices, and we have the highest certainty that the bars adhere to our rigorous quality standards, they are given our Digital Hallmark™ seal of approval.

    For further information, you can read more about GE's Phasor products.

    Video - Ultrasound Testing at Work (requires Flash player):

    Independent Audits

    The precious metals we store for you in high security vaults are audited regularly and reconciled with the metals in our database. All audits are conducted by independent third parties, and the reports are published on our website. The purpose of the audits is to ensure a one-to-one ratio of precious metals in our vaults and precious metals recorded in our database.

    The audits are performed in order to:

    1. Confirm all bars recorded in the vaults’ weight lists are actually stored securely in the vaults (Inspectorate audits the bar list by counting the bars in the vaults on a quarterly basis)

    2. Confirm the total weight of the precious metals in the bar list is always equal to the total weight of the precious metals recorded in our database (the ISAE 3402 audit performed by a Big Four accounting firm certifies the one-to-one ratio on a quarterly basis, and the report is made available to customers after they login to their GoldMoney Holding)

    GoldMoney Standard

    By introducing the GoldMoney Standard to the gold bullion we buy and store for you, we commit ourselves to providing you with the highest assurances that your gold is safe.

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