The latest story regarding the problem with fake gold bars was released yesterday. A gold bar in the U.K. was discovered to be filled with an element other than gold...
According to Reuters, a 1kg gold bar had been drilled and drained of the majority of it's actual pure gold content. Instead, the drillers replaced the gold with tungsten, and was discovered because the bar was two grams lighter than it should have been.
If you take a look at this picture, you will see that tungsten rods had been inserted into the empty holes (where the gold had been extracted from):
Tungsten is a clever metal choice for this particular use as it possesses a similar density to gold.
This particular story sheds light on a disturbing phenomenon in today's gold-hoarding economy...
How many of these impostors have been distributed into circulation?
Chances are, the average gold-owner will be realistically able to physically test each of his/her individual gold bars to confirm its legitimacy and authenticity.
Hypothetically, those gold owners may be in for a shocking surprise if they ever wanted to cash in their gold, expecting a fortune, only to find that the actual worth of their holdings may be slashed enough if they have fake gold bars in their collection.
If there are 1.3 million salted 400 oz bars in existence, and each one is 75% tungsten, then that makes 390 million ounces of gold which in truth isn’t there. At $1,660 per ounce, that’s over $600 billion which people think they own but don’t. To put that number in context, it’s roughly half the total quantity of subprime mortgages which had been issued at the height of the housing bubble.
This problem isn't exclusive to the U.K either. Ron Paul has repeatedly questioned the authenticity of the gold bars at Fort Knox while questioning if US gold reserves gold bars are 100% pure.
This dilemma also contributes to the supply-demand curve issues. If there are may fake gold bars in the bullion market, that means the actual supply of “real” gold is less than experts have assumed.
Tungsten still has quite a bit of value to it, at it is also a rare metal, but gold-owners expect to get what they pay for, and rightfully so.
In the meantime, all of you gold-buyers should be extra cautious and as diligent as possible with your purchases. Do you best to ensure you are working with the most trusted gold experts and dealers. These risks are real for anyone invested in physical-gold.
This video instructs how to detect tungsten in a fake gold bar via an ultrasound that can detect voids and contamination within the bars:
Posted by Adam English - Wednesday, January 16th, 2013
In what has becoming an ongoing series of articles about the growing rift between the German central bank -- the Deutsche Bundesbank -- and the Federal Reserve, it appears the situation has escalated once again. After the Fed denied repeated requests over years to inspect and verify the German-owned gold in the Fed's Vaults, German politicians and officials became increasingly irate.
Eric Sprott's analysis shows a "flat supply" and at least a "2,500 ton net increase in gold demand" since 2000. He manages nearly $10 billion at Sprott Asset Management. "Where's all the gold coming from?"
Sprott Asset Management is one of the most respected firms in the investment industry. Billionaire founder Eric Sprott talks about investment strategy and the performance outlook for gold with Erik Schatzker and Scarlet Fu on Bloomberg Television’s ‘Market Makers.’
Obama won the election giving us all even more reason to invest in gold; the gold price has hit a fortnightly high and is still climbing having seen its biggest jump in over seven weeks. Not only is it set for its 12th yearly gain, analysts have now returned to saying they believe gold will end the year on $1,800, but it is up 10% on the year. Silver has also advanced, reaching $32.35 earlier this morning.
Gold inched up on Wednesday but traders remain cautious ahead of the nonfarm payrolls report and the imminent U.S. presidential election.
The devastation of Hurricane Sandy will be a further blow to the already fragile U.S. economy. The destruction of property and vital infrastructure - two of the vital components in the wealth of a nation is negative for the economy.
Gold is back. With global investments delivering little returns, the eyes of many investors have turned to the old favourite. But the new gold rush has come with a big rise in scams and confidence tricks. They now represent a major threat for companies and individuals and many of them take place in Africa.
Gold remains popular, despite the doubts of economists.
GOLD is the most difficult asset class to analyse. For a start, it divides opinion so sharply. Its supporters have a quasi-religious fervour, regarding the metal as the one true source of value. Its detractors (a group that includes many economists) treat it, in John Maynard Keynes’s phrase, as a “barbarous relic” that has no place in serious discussions of monetary policy.
FINANCIAL MARKETS are dominated by large funds that behave like lemmings—follow the herd and suffer the consequences. Investors should not fall for the commonly held myth that all professionals have an edge over smaller institutional and individual investors.
Readers of the usual perma-bull gold and silver sites most certainly know by now that the perma-bulls have often talked about how China is always at the ready to swoop up as much gold and silver as they can get their hands on.
When considering whether gold is a value investment, one needs to first recognise that gold does not have a balance sheet, management team, price-earnings ratio or any of the other things one needs to analyse before making an investment. Also, gold does not generate any cash flow, so it does not pay a dividend.
Last week was the 41st anniversary of one of the most disastrous days in world history. The 15th of August 1971 was a fatal day for the world economy and is likely to lead to more human misery than any world war.