Precious metals such as gold and silver continue to be valuable assets, as people can continue to persevere their wealth. Even today, various developed economies have gold as a cornerstone of their economy. Therefore, gold has been a great investment tool for centuries that retains its worth today.
Counterfeiters have also looked for opportunities to make a fortune by replacing the original coins with fake ones. Coin counterfeiting is not something new and has been around for centuries. Let's take a look at the brief history of counterfeiting.
History of Counterfeiting
Counterfeiters have always looked for ways to manipulate people and sell less valuable copies of the gold coin. Early counterfeiters used to cast coins with precious metals that had the same characteristics as gold. Many emperors and kings often punished counterfeiters severely with consequences even including death.
Over time, counterfeiters have come up with new tricks and techniques to replace original gold coins with fake ones. One popular way to make perfect counterfeits of gold during old times was by covering less valuable metal alloys with gold. This trick is even common today, but uses more advanced methods.
Counterfeiting in the Modern World
You might wonder why counterfeiters still create fake coins. After all, many tangible and intangible assets are available in the market. people and countries alike continue to use fiat currencies for most transactions today are performed using currencies, slowly disappearing away as cashless payment systems take their place.
Today, different financial institutions will usually mint gold and silver coins for their rarity. They can quickly become souvenirs for consumers or unique coins that people use for trading and investing. Counterfeiters primarily target gold coins in the modern era for their high value. Antique gold collectibles and items have immense value, making them an attractive opportunity for counterfeiters.
These collectibles have seen an increase in value over the last few years, with some items being more valuable than gold. Their high value gives a perfect incentive to counterfeiters to create high-quality copies and sell them at a profit.
How to Spot Gold Coin Counterfeits and Avoid Fraud?
Gold and other precious metal commodities remain the best investment opportunity in a time of market uncertainty or economic downturn. Therefore, many investors turn towards it when cash-backed assets plummet, and the US dollar starts to weaken. Since the 2008-09 market crash, many investors prefer gold over other types of assets.
Even during the pandemic, many investors turned their eyes towards gold coins and antique items. However, checking the authenticity of the gold bullion, coins, or other precious items before buying them was vital. You don't want to get counterfeit gold coins from a scammer at a special discount.
To make it easy for you, we have made a list of things you can do to ensure you get your hands on genuine gold coins. While other method involve modern technologies, these methods can quickly help determine if the gold coin or item is original.
So, if you want to find out that the gold coin you wish to purchase holds its actual value, you can follow the steps below.
Always Purchase Gold Coins from Registered Reputable Dealers
The best way to ensure you get original gold coins is by going to a trusted and well-known dealer. You'll find many reputable dealers who sell authentic gold coins with their actual value. It is the best way to reduce the risk of counterfeit gold coins.
Many scammers use shady and illegal channels and offer special discounts to lure buyers into purchasing fake gold coins. While there is no way to tell if a dealer follows all the rules and does not engage in unethical practices, reputable brands avoid counterfeiting.
So, there is less chance that you will get scammed. It is a red flag if a dealer offers you gold coins with a special discount without any concrete reason. You should also avoid buying dealers' coins below the market value.
Perform a Magnet Test on the Coins
Another way to determine if the gold coin is original or a counterfeit is by checking with a magnetic. Coins that contain a higher concentration of gold won't attract to the magnet during the test. This characteristic of gold can help you know if the gold coin is counterfeit or not. On the other hand, most counterfeit coins have metals that will attach to the magnet.
So, the easiest way to determine whether the gold coin is real is by conducting a magnet test. However, many counterfeiters are now aware of this trick and use non-magnetic alloys for counterfeit gold coins. So, there is a chance that the magnetic test might not work in some cases.
Examine the Mint Markings and Coin Details
Examining the coins details and mint marking is not possible for everyone. This method is only applicable if you have experience the gold industry and can identify any inconsistencies in fake coins. The original coins will have standardized mint markings, which experts can find.
Since the counterfeiters don't have the genuine models to cast the gold coins, they won't have a mint marking. Counterfeiters use actual gold coins to create their cast. As a result, there are some inconsistencies that an average person might miss, but an experienced eye can easily spot them.
If you don't have the skills and knowledge to determine if the gold coin is real, then you can as a trained professional for help.
Weigh and Measure Gold Coins
New gold coins have rigid rules regarding their measurements, which they need to follow. It might be difficult to differentiate between real and fake coins by just holding on it. However, professional equipment makes it easy to find the slight discrepancies in the coin.
You can use various measurement tools to catch the significant differences between genuine and fake coins. Typically, the original gold coin will have consistent dimensions. Their weight and size will be the same, whereas the fake ones will have an inconsistent size and weight.
Compare the Price
Most counterfeiters use special discounts and offer to trick customers into buying fake gold coins. You might want to jump on the offer as soon as you find a gold coin at a great price. However, you should instead do your homework and find out why the gold coin is available at a lower price.
Check with the market price of the gold coins to know the exact value of the gold coins. If you notice a massive difference in prices, there is a good chance it is a scam. Gold brokers or dealers won't offer special discounts on coins since they make their living off commissions.
Perform a Stack Test
As we mentioned earlier, gold coins that come from registered mints will go through inspections to ensure they have the exact dimensions. So, you can conduct a simple stack test to find out if there are any inconsistencies in the gold coins. You can stack the gold coins on top of each other to spot any differences.
Genuine gold coins are easy to stack, and you can easily balance them without any significant differences. However, if you find some bumps in the stack or it looks unbalanced, the gold coins are counterfeit. You can get the help from an expert to examine the coins.
Ping, Ping, Ping
The oldest way to know if the gold coin is a counterfeit is by doing a sound test. In the past, experts used to strike the gold coin with another or on a hard surface to listen to the sound. If the gold coin created a high-frequency noise, it indicated it was a genuine coin.
Counterfeit coins contain inexpensive metals and create a dull sound when hit against a gold coin or hard surface. This method is still common to know if the gold coin is real by many professionals.
Specific Gravity
A specific gravity test is an advanced method that helps you distinguish between a genuine gold coin and a fake one. However, the testing process needs lab equipment and conditions that regular buyers won't have. Nevertheless, it is imperative to learn about this method.
The experts will dip the gold coins into the water, and then conduct a series of tests to identify their specific gravity. In the case of gold coins, the specific gravity should be close to 19.3. If the coin has a specific gravity below the 19.3, there is a good chance it is a counterfeit coin.
Check for Conductivity
Lastly, you should check the conductivity of the gold coin to know if they are originals or counterfeits. Gold is an optimal heat and electricity conductor, which is why you can find it in some cables and conductors. All you need to run a conductivity test is an ice cube.
Put the ice cube on the coin; if it melts quickly, it is a genuine gold coin. On the other hand, the gold coins made from inexpensive metals will take more time to melt the ice.
Wrapping Up
These are some ways to check the authenticity of your gold coins. Now you can make sure you’re not buying counterfeit gold coins, which will allow you to save your investment. Investing in gold can also offer various benefits. Gold is an excellent hedging tool against inflation, or you can keep it for retirement.
However, you should take the services of registered gold exchanges and brokers to buying or investing in gold. You can also get help from professionals at What Is A Gold IRA to help you purchase genuine gold coins.
