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fake tungsten gold bar

Fake Tungsten Gold Found

by Trace Mayer, J.D. on March 2, 2010 · 32 comments

Reading time: 5 – 8 minutes

When one goes to buy gold they want real gold, not some cheap substitute like a fake tungsten gold bar. There has been a lot of rumor, neither credible nor verifiable sources, about bars containing both gold, the Ancient Metal of Kings and tungsten, the ‘heavy stone’. But these fake tungsten gold bars could be an epic problem

Just like a $100 bill costs about $.04 to produce leading to a profit of $99.96 from such unethical currency production so likewise with the price of gold at $18,000 per pound and the price of tungsten around $25 per pound there is, for the unscrupulous, an opportunity for arbitrage with fake tungsten gold.

GOLD PROPERTIES AND TUNGSTEN PROPERTIES

As Rayner Hesse observed on page 191 of Jewelry Making Through History, with the Stamp Act of 1854 the purity of gold jewelry was reduced and required to be hallmarked at 9k, 12k or 15k and so the search for gold alternatives began. Within a few decades the House of Cartier had gone international and Edward the VII named it the ‘Jeweler of Kings and King of Jewelers’. Presently, many watches are being made with tungsten carbide instead of gold because it is lightweight, takes a polish and is scratch resistant.

Gold has a density of 19.30 grams per cubic centimeter at room temprature and a liquid density at the melting point of 1,947.5°F of 17.31 grams per cubic centimeter. Tungsten has a density of 19.25 grams per cubic centimeter at room temprature and a liquid density of 17.6 grams per cubic centimeter at the melting point of 6,192°F.

But despite being used for jewelry and having similar densities gold, AU 79, and tungsten, W 74, are not the same element. But a 400 ounce bar with 1/16″ gold surrounding a tungsten slug would cost about $50,000 to make and would likely pass sound, feeling, chemical and weight tests along with an x-ray fluorescence scan. On the other hand, the higher profit margin $500 bar using small tungsten slugs with lead alloy would still pass a sound and feeling test but would be slightly underweight and it is likely that neither a chemical test nor a x-ray fluorescence test would be passed because the gold coating would not be thick enough.

HOW TO DETECT A FAKE TUNGSTEN GOLD BAR

Detecting a high-quality fake tungsten gold bar would be extremely difficult. It would likely require significant and material alterations to the bar being tested and this would negatively affect the marketability if its hallmark veracity were vindicated just like real Abraham Lincoln facts implicate him.

This is likely a reason why page Page 11 of the GLD prospectus states “Neither the Trustee nor the Custodian independently confirms the fineness of the gold allocated to the Trust in connection with the creation of a Basket [issuances].”

Nevertheless, the truly determined and experienced can ferret out whether there is tungsten contained in their gold bars. In fact, some already have found tungsten gold bars which purport to be gold and this is how.

gold refining

GOLDMONEY DOES ULTRASOUND GOLD TESTING

As of October 2010 GoldMoney begun using ultrasound scanning technology to verify that each of the gold bars we store for you is free of foreign materials and defects. Any bar that fails the ultrasound test is melted down, assayed and then recast into a new bar. We aim to complete the scanning of all gold bars in the first quarter of 2011.

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.

[flowplayer src='http://www.runtogold.com/videos/goldmoney-gold-testing.m4v' width=520 height=293 splash='http://www.runtogold.com/images/goldmoney-gold-testing-ultrasound.jpg']

TUNGSTEN GOLD AND GOLD ALTERNATIVES

If one is concerned about the quality of their gold then the other precious metals like silver and platinum are good alternatives with the silver prices and platinum prices being strongly correlated with the gold price. One reason they are safer is because both silver and platinum have industrial applications and are widely consumed. The silver and platinum stock are rotated on a regular basis being melted down and fashioned into cell phones, catalytic converters, etc. and so the purity and integrity of the above ground stockpile is held to strict account because of physical demand market forces. It is unlikely that the 5 dollar gold coin10 dollar gold coin25 dollar gold coin and 50 dollar gold coin would include any tungsten.

CONCLUSION ABOUT TUNGSTEN GOLD

There is plenty of profit motive for fraudulent tungsten gold bars that are stuffed with tungsten. Imagine the pandemonium if the central banks not only had less than half the gold they claim but if of the gold they have the majority of it is really tungsten gold. Tungsten gold bars being ferreted out in Germany is disturbing. This is just another example of why to buy platinum or silver.

DISCLOSURES: Long physical gold, silver and platinum with no interest in the problematic SLV, Streettracks Gold ETF Trust Shares or the platinum ETFs.

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32 comments

ABOUT THE AUTHOR: Trace Mayer, J.D., author of The Great Credit Contraction holds a degree in Accounting, a law degree from California Western School of Law and studies the Austrian school of economics. He works as an entrepreneur, investor, journalist and monetary scientist. He is a strong advocate of the freedom of speech, a member of the Society of Professional Journalists and the San Diego County Bar Association. He has appeared on ABC, NBC, BNN, radio shows and presented at many investment conferences throughout the world. This is merely one article of 241 by .
Free Free Great Credit Contraction Sample

{ 29 comments… read them below or add one }

1 Tony Lewis March 2, 2010 at 11:53 am

Trace,

What was the name of the Bank that shipped the tungsten filled gold bar to the German refiner?

Thanks in advance.

Tony

2 Trace Mayer, J.D. March 2, 2010 at 12:00 pm

I did not catch it from the video. Probably JP Morgan!

3 Henry March 2, 2010 at 12:25 pm

I knew it. I’ll bet that GLD bought a bunch of tungsten. The prospectus doesn’t seem to have any legal method of discovering the fraud: who can force an investigation if the custodians and sub-custodians and their sub-custodians are not accountable? And what about Fort Knox and the London banks?
The game being played out follows a similar theme: the US dollar is the strongest currency BY DEFAULT.
Primarily the dollar gains strength because it is the world’s largest reserve currency. Everybody holding dollars stands to lose and thus the dollar has “equity through ubiquity”.
Secondly, any challengers to the dollar are made weaker. The Euro is being shorted by Soros and numerous hedge funds at the same time the media is trumpeting stories about Greece and the sick PIIGS.
The Gold contender has been attacked by GLD and Comex, which have been used to drive down the gold price. Now we see that the gold supply has bee seeded with fake gold. I wonder if we might see price instability in the near term because of doubts in gold markets. If that happens, I believe that eventually the gold price will be that much higher once all the fakes are discovered.
My question is: How has GoldMoney avoided tungsten? Should we look into buying 1,000 gram bars or converting gold to silver?

4 Trace Mayer, J.D. March 2, 2010 at 1:21 pm

Well, I do not get anywhere close to GLD for these obvious reasons and just keep accumulating the physical metal. Because of the checks and balances built into the Association I doubt that LBMA bars have been contaminated but if they have then this is epic.

I figure if any LBMA bars are safe it would be those in GoldMoney because they work with a few refiners, IAMGOLD is even a shareholder and DRD (where James is on the board of directors) used to be a shareholder but was required to divest because of the South African government’s decree, and so the gold goes from the mine to GoldMoney’s vault. I have not converted any of my position but if there were any issue I would convert it at the click of a mouse.

What I do with precious metals is accumulate on a regular consistent basis with a certain percentage of my free cash flow and so with that regular savings I have stopped purchasing gold and instead began acquiring primarily platinum and also some silver. The outlook for platinum is just too tempting and I have been buying it hand over fist. Unlike many metal investors I actually hope the prices stay low for a while as I then get more ounces.

5 Robert Happek March 2, 2010 at 5:47 pm

I think that freshly minted gold coins from the large and reputable mints (in the US or Canada or Austria) are pretty safe from the risk of contamination with tungsten. The problem arises with those gold coins and gold bars which have been bought on the secondary market by the banks and the dealers. Some of these pieces of gold are certainly fake. This is analogous to the fact that a certain percentage of our currency in circulation is forgery.

In the case of doubt, one can always send the questionable piece to a reputable refinery asking them to melt the gold and to assay it. This comes at a cost. However, the cost is not that large. The best option is to stick with a reputable dealer who sells newly minted stuff only.

Ultimately, it all comes down to trust. We need trust for the paper currency system to function. We also need trust in order for the precious metal trade to work, regardless whether gold or platinum or silver. The possibilities for fraud are endless.

6 Patrick March 3, 2010 at 5:47 pm

That video is fake… not to mention I could have made a better one myself. Anyone who took 30 seconds to check the periodic table would know that tungsten is gray/white and lustrous. That stuff in the middle of the broken bar that guy was holding looks more like chocolate… nice try, but pure BS. The title of your article is very misleading.

7 Trace Mayer, J.D. March 3, 2010 at 9:59 pm

Patrick, here are pictures of a black tungsten ring and some tungsten carbide rods:
http://www.runtogold.com/images/black-tungsten-ring.jpg
http://www.runtogold.com/images/tungsten-carbide-rods.jpg

I am interested in what part of the video is fake. In the article I make no assertion as to when the fake gold bar was found. The video speaks for itself that this bar is not fine gold of the quality asserted. Now, narrowing down the video’s assertion about tungsten being the material inside the bar, that may be more difficult to prove as it would be difficult to get the bar in the video.

But the overarch-arching issue of counterfeited gold bars still stands and the material inside the bar featured in the video, whether it is tungsten, lead, or chocolate, is immaterial to the issue of being aware of the possibility that counterfeited gold bars can possibly exist and the video is an example of this possibility. Therefore, I am not sure how you can assert that the bar featured in the video as a counterfeit does not contain impure materials, of whatever type, and is therefore a fake.

So yes, the title could possibly be inaccurate but the substance of the article, as best I am aware, would still stand. Nevertheless, if there is a credible and verifiable source to cite, not some hearsay email or phone conversation, which addresses any issues in the article, such as the material within the bar in the video, I would appreciate the source so that it can be linked to for readers to further investigate.

8 Patrick March 4, 2010 at 1:26 pm

I never said the bar wasn’t fake, meaning that it doesn’t contain 100% gold. That clearly appears to be true. Although, whether the outside of the bar is actually gold is also, IMO, up for debate, since it has not been verified by any legitimate 3rd party testing house, with a documented and trusted history and using standards traceable to NIST… it simply appears in a foreign language video with English translations of poorer quality than would be expected on a free site like Babelfish… but I’ll leave that for another discussion.

Anyway, I suppose my suggestion is that, IMO, you may have missed a potential point here. That being that you may be unwittingly doing the dirty work of the global bankster scumbags by being one of the many sources and outlets perpetuating what is at least for now, only a myth. Until proven otherwise, I believe the whole thing to likely be a scam by the paper aristocracy, doing their best to continue to suppress the true and legitimate real price of gold. Of course I could be wrong, but until then, that’s my opinion.

Oh, and by the way, Tungsten carbide is an inorganic chemical compound which contains equal numbers of tungsten and carbon atoms.

9 Jim, Leeds, UK March 5, 2010 at 5:16 am

Check out the latest on this at Bron Sucheki’s page – Gold Chat – the video is apparently 10 years old, and was loaded onto YouTube from a totally new account (ie one that was set up for the purpose of putting this into the public domain). Best ask yourself, who benefits from making people paranoid about purchasing physical gold ??…

10 John De Melville March 6, 2010 at 12:46 am

- that video is over ten years old. The refiner spotted the fake immediately. In the subsequent ten years they haven’t come across any more fakes. Scaremongering? Why now?

Quick everyone, don’t trust physical gold, put your money into paper;)

11 DDT March 6, 2010 at 1:08 am

Sheesh you guys, this is the 21st century not the 18th!
There numerous ways to non-destructively test gold bars.
Neutron activation, gamma rays, sound waves, are just few things that would betray a fake bar.
Tungsten has only one property in common with gold: density. Everything else is wildly different.
Why do you think they cut this particular one in half?

It is my understanding many vaults test their entire inventory every year and every time new bars arrive. Do they tell you how they do that? Of course not! They won’t even tell you where the vault is.
Deal in physical or allocated ownership in London good delivery bars, and you’ll probably be safe.

having said all that, there are obvious reasons to create fake or proxy bars, so beware in unaudited or certified markets!

12 Trace Mayer, J.D. March 6, 2010 at 2:18 am

DDT, can you please provide some citations about these numerous ways to non-destructively test gold bars. I think many others would it particularly helpful. It should be kept in mind that LGD bars do have chain of integrity and chain of custody along with indemnification clauses which may make the probability of fakes much lower. Thanks.

13 Trace Mayer, J.D. March 6, 2010 at 2:24 am

Jim, how is the timing relevant to the issue of whether gold bars can be faked with tungsten or other materials and whether such a faked gold has been found?

14 Patrick March 6, 2010 at 8:24 am

It’s relevant because your article leads the reader to believe this is recent news. If you were to present this as evidence, would it not be necessary, or at least appropriate to point out that’s it’s a decade old? Again, my point is that there is a significant amount of fact checking, follow-up and due diligence missing from this article. As a result, it’s misleading at best.

15 Trace Mayer, J.D. March 6, 2010 at 1:08 pm

Patrick, I think you are implying and inferring assertions which are not made in the article. For example, can you please cite specific language, either in the article here or in one of many places it has been syndicated like GoldSeek, that would lead a reasonable reader to believe I assert the video to be ‘recent news’?

Of course, every article could contain more fact checking, have more follow-up and additional due diligence could be ferreted out. Fortunately, websites are not limited in word count like newspaper columns but an unfortunate side effect has been a multitude of authors that regularly vomit voluminous amounts of coagulated bile shaped like letters instead of sharp, concise, finely honed yet entertaining and well flowing expertly crafted pieces of art. On this website, occasionally the editorial decision is made with articles, like Inflation With Gary North Or Deflation With Mish or H.R. 4248 Free Competition In Currency Act Of 2009 to be extremely long, thorough and laden with facts and citations. But because of the large amount of extremely high net worth individuals who read my articles and also communicate with me on a regular basis therefore I have a delicate balancing act to perform because I acknowledge their and all of my reader’s time is extremely valuable.

This is one reason I include an approximate time cost at the beginning of each article; I neither take anyone’s time and attention for granted, both of which are usually required to digest my often dense articles, nor feel it is in my or most of my reader’s best interest to be bombarded with 30 minute articles on a regular basis. Do you have any idea how much time and effort it takes to craft an article like the two mentioned earlier? And this website is primarily operated as a hobby, there is neither intrusive flashy or distracting advertising like Bloomberg nor an annoying ‘pay wall’ like the WSJ, NYT or Financial Times. I hate to think if I had to take into account the cost of articles in an effort for profitability while competing against websites like RunToGold as I merely make the website at least cover its own costs since many of the time saving services, like the free update emails, a dedicated server to increase page load time, etc. cost money. After all, we have businesses to run, investments to make, profits to earn along with the more important things like friends and family to spend time with.

In conclusion, I attempt to boil down to the relevant facts only the most essential parts while still retaining an entertaining flavor and vivid style, like with the Laboon article, in an effort to conserve the readers time and there are always comments added where additional facts are presented and discussion or insightful analysis takes place. This article is a prime example; if someone would find the timing of the video relevant, well, that fact has been included in the comments by my wonderful contributing readers, even if they may disagree with my editorial decisions ;)

16 tony bonn March 13, 2010 at 10:31 am

i really don’t care if the article is 10 minutes or 10 decades old….it is important information regardless of its age…

i would be interested for someone to prove that fake gold bars are not a risk and that the video has no relevance to gold purchases.

17 Rick March 20, 2010 at 3:01 am

In response to an earlier question, the company discussed in this video is Heraeus in Hanau, Germany. Their website is:

http://www.heraeus-edelmetallhandel.de/en/bankenundanleger/heraeusedelmetallbaren/heraeusgoldbarren/Auswahlseite_Goldbarren.aspx

I speak German, so it helped a little. The translation was not done by a native speaker of English.

The first video in the link below discusses further:

http://bobchapman.blogspot.com/2010/03/bob-chapman-on-gold-plated-tungsten.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+BobChapmanBlog+%28Bob+Chapman+Blog%29

18 Trace Mayer, J.D. March 20, 2010 at 3:15 pm

Thanks Rick. We know the company discussed is Heraeus. What we are after is a page on their website where they directly address the video, which your link does not do. Would love to know if there is a credible and verifiable link from them discussing the bar in the video.

19 Robert Happek March 21, 2010 at 4:20 pm

If the video is indeed 10 years old and this particular piece of gold was just one fake piece of gold found, then the full incident is not worth it to waste our time on it. I suspect that most gold coins or bars are inspected only visually and not really tested thouroughly using any of the sophisticated methods known to test gold without destroying it. The situation is similar to the trade of paper money. If you go to any bank and deposit any paper money, that money will not be tested by anybody. Similarly, in the gold trade, gold is inspected visually but not really seriously tested. The reason is: the probability to find a fake is so low that most gold dealers do not bother.

Let’s face it. The American Gold Eagle coin is not tested for its gold content by the government or the mint or by any of the dealers selling these coins. The refiner of the original gold who produced the 1 ounce blanks simply stated this is 1 ounce of 22 karat gold. From there on, everybody in the gold trade simply repeated that statement, but nobody bothered to check that statement. Trust is indeed the basis of the precious metal business. Absolute certainty is not possible in this world. Neither with paper money nor with gold.

20 Trace Mayer, J.D. March 21, 2010 at 5:33 pm

Robert, those all seem to be excellent reasons for testing gold especially if the video is 10 years old. Of course, the rule that ‘absolute certainty is not possible in this world’, without descending into a Decartes argument, is possible with gold because anyone can melt it down and assay it to their personal satisfaction. The issue, as you point out, is the cost/benefit analysis. And cash deposited at a bank is tested; you should try depositing $50,000 in cash sometime ;)

21 Robert Happek March 21, 2010 at 8:35 pm

Trace,

attempting to deposit $50,000 in cash is a dangerous proposition. Not only will the cash be tested, but more importantly, the IRS and the FBI will launch investigations into money laundering and terrorism financing. I already feel guilty by trying to withdraw $1,000 in cash. I feel so much safer charging my credit card with thousands of Dollars every month, but cash makes me feel uneasy.

Does anybody remember former governor Elliot Spitzer who broke the law by trying to withdraw $4,000 in cash using a technique called “structuring”? Cash is indeed dangerous and better left in banks which have all the safety tools to deal with this dangerous substance.

Not only must we pay our taxes fully and on time, but we must also keep all our financial transactions open and transparent for the authorities.

The desire for privacy is already an indication of criminal intent.

22 Trace Mayer, J.D. March 21, 2010 at 10:24 pm

Robert, there are many legitimate reasons an individual may desire privacy and seeking privacy is both legal and moral in many cases. The proper role of government is to protect the privacy and secrecy of individuals, not government and privacy of the individual being protected from governmental intrusion is enshrined in the United States Constitution under both the 4th, 5th, 6th Amendments and incorporated to apply to the States under the 14th Amendment. There are many reasons for this as it helps lead to a safer and more orderly society.

For example, the State of New Mexico has a program where they help guard the privacy of women who have been the victim of domestic abuse. Of course, I agree with you that it is wise for one to pay their taxes fully and on time, not because of any moral or ethical responsibility, but because the criminal gangs costumed in government regalia will use deadly force in the commission of their robbery through taxation of innocent individuals if those individuals sufficiently resist.

Yes, ‘structuring’ is an issue and should be avoided but the use of cash, which has been decreed legal tender, is neither illegal nor evidence of wrong doing. Consequently, your feeling of guilt when withdrawing $1,000 in cash is irrational. In many cases using cash can protect one’s privacy which can reduce an individual’s profile with regard to criminals who desire to engage in identity theft, kidnapping, or many other nefarious purposes. I have found no issue using large amounts of cash which make it a ‘dangerous proposition’. On the other hand, the use of credit cards which deposit tremendous amounts of information into transactional databases which can be viewed by tens of thousands of employees and the data can be sold to third-party advertising partners can leave one naked of their privacy and allow those who have access to the purchase history of the individual, which history can be bought legally on the open market, a target of dangerous criminal activity.

But to think that the completely harmless instrument of cash is safer in banks is complete lunacy given the current state of the banking system with over 700 banks on the troubled institution list and the FIDC insurance fund with -$20B and as I have written about earlier the money market funds are at grave risk of loss also. Keeping a significant amount of cash in either American banks or money market funds is an extremely risky proposition given the very little upside potential and tremendous risk of loss. Given that FRN$ can become completely worthless through hyperinflation or other political machinations like in North Korea therefore keeping a core position of gold or silver coins, which have both supreme privacy characteristics and intrinsic value which are immune to both hyperinflation and political machinations, diversified throughout the world is a wise course of action for anyone’s portfolio.

23 hamster cheese April 4, 2010 at 9:27 pm

Coincidently, the GLD ETF was launched in Nov of 2004. Check out the price of tungsten shortly afterwards, notably from March of 2005 to May 2005. It more than doubled in that two months to new highs, and in a manner unlike any previous time.

24 Tony April 5, 2010 at 7:23 am

@ hamster cheese. Very interesting. Unless there was a shortage in tungsten’s industrial use, causing the spike in tungsten’s price, the implication is all too obvious. Better use Gold Money.

But then again, they haven’t responded to my emails as to whether or not they’ve been affected by the alleged JP Morgan gold and silver manipulation exposed by Andrew Maguire on King World News.

25 apms55 April 9, 2010 at 10:41 pm

Hi DDT fully agree with you “ this is the 21st century not the 18th “

To see how the industry test gold bars, just use GOOGLE (“ this is the 21st century not the 18th “).

Search for: ULTRASONICS – GOLD – PAMP.

If going too TECHNIQUE won’t stop you:

- look also for ULTRASONICS FLAW DETECTORS, – GE? – Olympus?, ,

- visit ASNT.org – The American Society for Non Destructive Testing, find a NDT Technician nearby?

Fight back fakers.

26 someone March 6, 2011 at 5:22 pm

There is only one way to make counterfeit gold, 100% gold on the outside and 33% gold on the inside (mixed with fools gold).

I lost my trust in humanity and the ONLY AND ONLY real gold can be had in thin sheets.

Its mostly fake as in NOT 99.99% gold.

27 Tao Tran Huu May 11, 2011 at 1:06 am

Dear Trace

We think we have the problem of Tungstengold bar in Vietnam and many thanks of yours informations. But ouside of Untrasound testting can you inform the other methodes that we can sure that we buy true gold?

Thank You
Tran Huu tao

28 al 156 December 2, 2012 at 10:00 am

inorganic compounds do not contain carbon. so, carbon/tungsten in equal parts is an organic compound. trivia but FYI. GREAT DISCUSSION. thanks, al 156.

29 al 156 December 2, 2012 at 10:05 am

a soldier from the Viet Nam war told me that even in those days they were making coins of gold only a small amount smaller than what they were copying and thus were profitting from this “fake”. now, gold/tungsten bars in Viet Nam I believe.

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