Do You Own Counterfeit Gold? Here’s How You Can Tell…

John Fisher

Finding a counterfeit gold or silver coin or bar in your stash is far more probable than one might think.

As economic times have become more uncertain, buyers are increasing their precious metals purchases. And counterfeiters are looking to cash in on the increase in demand, as well as the increase in precious metals spot prices.

Counterfeits have improved as technology has progressed, and China is leading the way in producing counterfeit precious metals coins and bars. While gold and silver have always been the obvious victims of counterfeits, even platinum products are now being counterfeited with great skill and success.

Counterfeit coins (and bars) are “flooding the market at an astonishing rate.” This is compromising the investments of collectors, according to the American Numismatic Association (ANA).

Not only are these counterfeits increasing in number, but also in quality and appearance.

“It’s a very serious problem and it’s really scary,” said Rod Gillis, ANA’s education director. “With improved technology, the fakes are getting better. It’s gotten to the point where even people who deal with coins all the time may not be able to recognize a counterfeit coin right away. ”

I’m a national veteran bullion dealer, and I agree. For many years, we could simply identify a counterfeit at first glance. Their appearance was just not comparable to the authentic coins. And if they were packaged, the packaging was a poorly sealed blister-pack. These days, the counterfeiters are improving in their technology, and the result is far-more-authentic-looking counterfeits and professional packaging.

If counterfeiters are willing to go through the time, energy and expense to counterfeit one-ounce silver products (and they are!), you can be assured that they are willing to counterfeit literally ANY gold product.

But You Don’t Have to be a Victim …

The financial loss incurred through buying counterfeit coins and bars can be almost completely avoided. A mix of common sense and employing the following criteria is virtually all you need to protect yourself.

First and foremost, if you ever find a precious metals product that is available at a price that is “just too good to be true,” then you’ll know that it is cheap because it is a fake.

There are NO amazing deals on authentic bullion at hundreds of dollars under the spot price, period.

Gold and silver are commodities and cannot, therefore, be bought at a discount. If you think you’ve spotted a bargain or are offered the deal of a lifetime, think again.

Safety with Graded Coins?

Let’s face it, the counterfeiting of rare U.S. coins is not a new thing. As early as the late 1950s and early 1960s, there were counterfeit 1932 quarters, 1916-D dimes, 1909 V.D.B. cents, and 1914-D cents with falsified added mint marks.

Buyers originally had some assurance of authenticity when they bought graded coins that were:

  "Slabbed" (encapsulated in rigid, tamper-proof plastic holders, complete with embedded holograms and other authentication technology from grading agencies), or

  Small gold bars that came in tamper-resistant, rigid packaging.

These products are now known to have active counterfeits in the market. We see numerous examples of counterfeit gold and silver bars and coins in our office from unassuming consumers every year.

Some dealers market numismatic coins. And this can lead investors to believe that they have safety and security from counterfeits, when they buy Numismatic Guaranty Corp. (NGC) or Professional Coin Grading Service (PCGS) graded coins.

This is not always the case, unfortunately.

A number of “graded coin” counterfeits have surfaced in the U.S. market. Worse yet, savvy counterfeiters are actually targeting low mintage coin releases, knowing that coin collectors are eager to complete a specific coin series … and may be less discerning and quick to buy.

For example, counterfeit Proof American Eagle and American Buffalo 1-ounce gold $50 coins have been reported, encapsulated in fake NGC plastic holders (slabs) with counterfeit grading inserts. (See this Coin World article. ) As far back as 2008, both NGC and PCGS warned that there were fake slabs with inauthentic grading certificates being used to infiltrate the market with counterfeit “graded” coins. NGC themselves offers a comprehensive list of U.S. Gold and numismatic counterfeits that have been identified. We will be happy to test your graded or numismatic coins for you to determine if they are the metal that they are stated to be.

Sample List of Known Counterfeits

Here is a partial list of known products that have already been counterfeited:

* Canadian Maple Leafs — 2011, all coins 2015 and later have anti-counterfeiting tech embedded in the coin.
** Maple Leaf 1 oz — Years prior to 2013. All coins 2015 and later have anti-counterfeiting tech embedded in the coin.
(More on these later.)

While this is only a partial list, the prospect of obtaining a counterfeit gold, silver or platinum coin or bar has clearly become much more probable. But there is authentication and assurance available to the buyer through highly reputable dealers.

Home Testing

The “old school” practices of testing gold and silver bullion still apply, but are insufficient in authenticating your coins and bars. Worse yet, some of the testing forms (use of acids to test) are destructive and result in a decrease in the value of your coins and bars.

#1: The Magnetic Test

The simplest and most-basic test is to use a magnet. But it must be the right kind of magnet. If you place a strong, Neodymium magnet (also known as a rare-earth magnet) on a silver coin or bar, it should not easily stick to it. Simply put, if it sticks or if the coin or bar slides easily, it is not silver.

Do NOT solely rely on the magnet test. Today’s sophisticated counterfeiters are often wise enough to avoid using magnetic metals.

The next test is measuring the specific dimensions of the coin or bar.

#2: Size and Dimension

Accuracy in dimension has greatly improved in counterfeits over the recent years. There was once a time when a seasoned dealer could very simply visually assess an improper dimension on a counterfeit at first glance. Today, you need to specifically measure the size and dimensions of the item.

Begin by buying a pair of digital calipers to measure the dimensions of your coin. Go to the official site of the item in question (the mint or manufacturer). If the measurements are off significantly, do some more research. Please note that measurements given on many sites are for the maximum size, as not all coins are perfectly even in dimension.

There’s also the vision test.

#3: Visual Inspection

A high-quality magnifying glass will be an essential asset. Professional dealers use 5x (like this one) or 10x jewelers loupes (like this one) to accurately inspect coins and bars.

Search the internet for your item in question. Look specifically for articles that might discuss counterfeits of your particular items. Many are pictured in detail on the internet. Does yours look as good or better than the authentic items? Often, but not always, counterfeits lack the detail and precision of the authentic product.

The inaccuracies and deviations on counterfeit coins have become so refined and legitimate in appearance, even trained numismatic professionals have been fooled. Herein lies the challenge.

Professional numismatists know exactly what to look for on both the obverse (front) and reverse side of a coin. You too must know exactly the details to examine, those that must be present, and those that might be missing or in the incorrect position on the coin.

#4: The Acid Test

This final test is highly accurate in testing surface metal, but is NOT recommended unless you are a professional.

We use the testing stone and acid test when clients are selling us old and broken jewelry. They have no intention of keeping the jewelry and it is headed for the smelter, so the small acid streak will not affect the value. An acid streak will, however, affect the value of your coin or bar. If you test bullion with acid, it will decrease the value as a result of defacing the coin or bar.

Acid testing will tell you if an item is gold or not, but it will not tell you if there is an inner base metal that has been heavily plated. All said, not a great test for the individual investor.

Effective Testing and Authentication

To make sure you own, or are about to buy, 100%-authentic gold and silver products:

  Buy from a dealer who uses the best authentication technology, and faithfully tests all products that they buy and sell.

  Understand the different types of technology and testing available.

  Find a dealer who is willing to authenticate the precious metals you have bought previously. This can give you peace of mind about any prior purchases.

Authentication Technology

For many years, the only non-destructive professional metals tester available was an X-Ray Fluorescence (XRF) machine. Even the portable versions require a $10,000+ investment. But more importantly, they cannot “see” through anything but the thinnest of plating and are unable to analyze the core of a coin or bar.

Essentially, they provide a false sense of security. And they do so at a high investment cost.

As a veteran bullion dealer, Fisher Precious Metals is not willing to expose our clients to any risk of inauthentic material allow any risk on behalf of their clients. We’ve invested in state-of-the-art technology, so we can authenticate every coin and bar that we both buy and sell.

In lieu of an XRF machine, we use two forms of premium coin and bar authentication in addition to weight, size and magnetic tests:

  The Sigma Metalytics Precious Metals Verifier and;

  The Bullion DNA Authentication unit from the Royal Canadian Mint

The Sigma Metalytics Verifier allows us to test any common coin or bar, and provides a reading in a couple of seconds without having to use acids, gels or filing. (All of which are considered “destructive” forms of testing.) 

Remember, there are ways to test your metals at home with an acid kit. But this is a form of destructive testing that will result in an alteration in your coin or bar … which will reduce its value.

The Sigma Metalytics Verifier unit is able to authenticate and penetrate 2 mm or more into the coins and bars within seconds, thus immediately identifying attempts to plate a coin. Using electromagnetic waves that penetrate into the coin or bar, plating and surface features are simply ignored and the main body of metal is assessed.

Better yet, the Verifier can authenticate through the plastic cases of grading agencies. So, graded coins do not need to be removed from their protective holders.

The Bullion DNA Program from the Royal Canadian Mint allows authorized bullion dealers to authenticate gold and silver Royal Canadian Maple Leaf coins directly with the mint.

For gold Maple Leafs dated 2014 and silver Maple Leafs dated 2015 and later, the Royal Canadian Mint has micro-engraved every coin with an anti-counterfeiting mark: a textured maple leaf and the coin’s production year.

The Mint’s non-destructive activation (DNA) technology captures images encrypted with a string of code and stores these in the Royal Canadian Mint’s secure database. Authorized Bullion DNA dealers such as Fisher Precious Metals own the hardware and software that make up the Bullion DNA anti-counterfeiting technology ecosystem.

Digital authentication is now the new mint-level, state-of-the-art anti-counterfeiting technology. Having access to it can provide precious metals buyers with peace of mind.

The major sovereign mints will likely follow in the footsteps of the Royal Canadian Mint; it will just take some time.

Final Thoughts

There’s really no reason why you have to become a victim of precious metals counterfeiters. Simply buy from a reputable dealer who will be happy to authenticate your gold, silver and precious metals right in front of you, or assure you that they have done so prior to shipping to you.

Unfortunately, the world of precious metals dealers can be one of false advertising and marketing schemes galore. Check out your prospective dealer thoroughly.

Don’t just read their website. Check their Better Business Bureau ratings and all of their BBB reviews. Look for quality reviews, not one- to three-word reviews. (Those are bogus reviews that are generated through software programs.)

Also check the dealer’s certifications and credentials. We are members of, or are credentialed by, the following organizations:

  American Numismatic Association (ANA)

  Numismatic Guarantee Corporation (NGC)

  Professional Coin Grading Service (PCGS)

  Professional Numismatic Guild (PNG)

  International Society of Appraisers (ISA)

  Gemological Institute of America (GIA)

  The Industry Council for Tangible Assets (ICTA)

We welcome you to bring any items you have purchased, no matter from whom, to have them tested in our office at no charge. Rest assured that you will have authentic gold, silver, platinum and palladium moving forward!

Sincerely,
John Fisher

P.S. You can contact Fisher Precious Metals by calling 800-390-8576 (toll-free) or visiting on the web at FisherPM.com.