Sunday, March 25, 2012

Tungsten Trick Hits Market for 1kg Gold Bars

There has been a raft of reports about 400oz gold bars in Hong Kong discovered to have been tainted with tungsten. Now, however, the scam seems to have migrated to the bigger 1kg gold bars.


Not only is tungsten extremely dense it is also not ferro-magnetic, making it an ideal ingredient for fraudsters looking to cook up a batch of modern fool's gold, as it won't be discovered with a simple magnet test. That leaves the use of XRF scanners as the only secure, straightforward method for ensuring you're actually buying pure gold.

Except that this scientific security seems now to have been erased from the success formula. Judging by the latest reports, XRF (x-ray fluoresence) scanners may not offer an adequate defense against this particular form of hoodwinkery.

This modern alchemists' stew seems to be based on a fairly simple recipe: take one bar of certified provenance, drill out some gold plugs, feed in tungsten rods and - unless a buyer is exceedingly careful - you've got yourself a gold sale at 'market value' PLUS a handy pile of surplus gold.

Leftovers have never tasted so raw for dealers in precious metals.

Anybody buying gold has for several years had to worry about the risks of a bubble in the AU market Given that the use of expensive high-tech scanners to determine the gold content of the material in question won't necessarily protect buyers from this form of criminal enterprise, does the gold market face a loss of confidence similar to that seen recently in global interbank lending?

ABC Bullion in Australia has the details of these shenanigans. Story via the SilverDoctors blog.

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