Counterfeit Coins: Why You Should Only Buy Gold From Credible Sellers
In the last few years, there has been a significant increase in fake gold coins that have gone undetected. Forgers now have access to sophisticated technologies that enables them to produce counterfeit gold coins that look identical to official mint-made bullion. The counterfeit coin industry is a multi-million dollar problem for investors. Buyers that get fooled into thinking they are picking up a bargain on bullion coins are in for a disappointment. Some investors have even paid the gold spot price only to find their one-ounce piece of gold is worthless.
According to the American Numismatic Association (ANA), the number of counterfeit coins that are flooding the market is troubling. The US Mint has warned investors that if you buy gold from unauthorized sellers you risk losing in excess of $1300. And criminals have plenty of unsuspecting buyers to target. Savvy investors know the $21.1 trillion worth of debt owed by the United States is going to cause the worst market crash in history. Subsequently, there is an increasing demand for precious metal products.
Because the price of gold and silver always rises during a financial crisis, bullion coins are a guaranteed way of hedging against inflation and increasing purchasing power. But only if you buy actual gold!
Gold coin security measures
Although precious metals manufacturers go to great lengths to prevent investors from receiving fake coins, counterfeiters are getting better at copying bullion coins. Precious metals manufacturers use state-of-the-art technology and employ various minting techniques to make it difficult to fraudulently replicate their products. Leading methods include:
- Intricate design
- Precise measurements
- Mint mark
- Holographic features
- Unique serial numbers on the product and presentation box
Despite these security measures, advancements in technology enables criminals to use graphic design programs that are capable of rendering exact replicas of the official coins. Counterfeit coins are typically made out of tungsten and lacquered with a thin layer of gold. This means the weight, dimensions, look and feel of the fake coins are the same as real coins.
Subsequently, it is very difficult to see the difference between a real gold coin and a fake gold coin to the naked eye. When the counterfeit coins are premium copies, they even pass the jewelers acid scratch test – which by the way is not a good method anyway because it damages the surface of the coins. Fortunately, there are ways of ensuring gold and silver coins are genuine.
Gold coin security measures
Although there are some sophisticated counterfeit coins on the market, fake coins usually have at least one flaw. Experienced traders working for reputable gold and silver coin resellers should be able to spot blemishes. We use various techniques to ensure customers are not receiving counterfeit goods. Counterfeit coins may have one or more of the following errors:
- Inconsistent color
- Lettering of the inscriptions may be the wrong font
- Finer details in design may be missing
- Diameter and thickness may not be accurate
- Coins that reveal imperfections and abrasions are signs of tool marks
Precious metals distributors also use a couple of techniques that can also expose a fraudulent coin. The most common is the gravity test which involves simple calculation of the metal’s weight in open air and in water. At Capital Gold Group, we have a sophisticated Precious Metals Verifier. The advanced device can accurately detect the resistivity of precious metals and determine the purity of the metallic composition of a coin or bar.
Furthermore, fraudsters are putting fake gold and silver coins into authentic-looking coin holders that are distributed by national and private mints. The “slabs” come complete with bogus bar codes and registration numbers. The best way of verifying whether a precious metals product is genuine, is to contact the manufacturer directly and ask them to confirm the serial number on the gold or silver coin you have purchased was issued by them.
However, if you have already purchased a fake coin, it may be too late to do anything about it. You will have already lost your money.
How to avoid receiving counterfeit coins
Criminals can buy fake coins online from suspect websites such as Alibaba, eBay, and Craigslist. The coins are then sold through pawn shops, disreputable coin dealers and newspaper ads that appear to be great deals. The golden rule is, if a deal is too good to be true, it’s probably a fake coin. Buyers that are unfortunate, or foolish enough, to buy gold coins from sellers other than credible coin dealers are most likely to lose money. Police departments are reluctant to get involved because it is difficult to prove a crime has been committed.
Federal law enforcement is trying to be proactive by seizing fake coins at source and preventing them from entering the country. However, because forgeries are so convincing, the coins can sometimes get through customs undetected. The only way to protect yourself from receiving counterfeit gold is to purchase precious metal products from a certified dealer that has a credible reputation. Look for company’s that have a longstanding history, an online reputation as an industry leader and that guarantee what they sell are genuine products.
Capital Gold Group buy our gold coins and silver coins from national mints and reputable private mints. Furthermore, we certify that all our precious metal products are 100% authentic. As extra protection to our customers, we also offer a buyback policy. The more we can do to protect our customers from receiving counterfeit products, the more we help the authorities combat coin crime.
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