It pays to be careful when you buy gold bullion. A single ounce of gold is worth $1,300 today. Getting cheated would be an expensive mistake. The good news is, counterfeiting is both rare and difficult. Taking some precautions when you buy gold will protect you. The bad news is, a couple of high profile news stories from Canada involving fake gold could be signs that someone has pulled it off.
If you’re worried about the authenticity of gold you buy, have it assessed or tested. One sure fire testing method is Bullion DNA, an authentication system designed by the Royal Canadian Mint. Bullion DNA uses laser-marking and advanced engraving to authenticate gold coins from the RCM. These can be read with a device both investors and dealers can obtain, proving the authenticity of gold coins in seconds. Bullion DNA is what makes bullion products from the Royal Canadian Mint some of the safest purchases in the world.
There are other, informal tests you can use, such as weighing the coin or bar to check that it matches the inscription, as well as the dimensions. If a counterfeit uses a different metal, either the size or the weight of the coin may be amiss. There’s also an acid test, called touchstone testing, that only 18 karat gold or higher can pass.
When you buy gold online, know and trust the gold source. Never agree to meet someone and exchange cash for gold without knowing who they are, at least not without testing the gold. A gold dealer that sends insured and guaranteed gold bullion purchases is a much safer bet. One example is Silver Gold Bull. They buy gold coins and bars directly from the Royal Canadian Mint. They also thoroughly test any gold they purchase from private investors and disclose whether or not the gold has been preowned.
Even banks can be fooled by counterfeit gold. Take the example of the Royal Bank of Canada, which sold fake gold to a jeweler in Ottawa. It was made to look like a Royal Canadian Mint bar, which is 99.99 percent pure gold, but the jeweler quickly found it was a fraud when he tried to put it through the mill. RBC said it was investigating how it acquired the bar. One source could have been the way banks store gold. They deposit gold bars and coins all in the same place. When you store your gold with them, the quantity of the deposit is recorded, but not the exact item. You don’t know what you’re getting when you go to take your gold out.
If that sends chills down your spine after the gold counterfeiting incident, it should. You could put real gold in and get counterfeit products back. Now may be a good time to test your gold bullion products and move them to allocated storage. Allocated storage from Silver Gold Bull, a Canadian bullion dealer, keeps your gold separate from everyone else’s. Allocated storage is the most effective way to ensure that your gold doesn’t fall victim to counterfeiting scams after you’ve purchased it.