Gyroscopic Investing

It's been a while since this has been discussed here. What is the current state of affairs?

I'm especially curious which coins are most counterfeited, and which are not. I would think coins of partial-ounce size would not be.

Shortly after I bought the Gold Coin Balance to test my Golden Eagles, they withdrew their guarantee after someone sent them a passable fake. They still sell the balance but don't guarantee Eagles or Kruggerands any more. Here is the write-up on their website.....

https://goldcoinbalance.com/fake-tungsten-gold-coins

Hmmm, I wonder if they did the ring (sound) test on it. It seems like passing the balance and sizing is only halfway there.

I Shrugged wrote:Hmmm, I wonder if they did the ring (sound) test on it. It seems like passing the balance and sizing is only halfway there.

The fact that they could tell it was fake means the coin must have failed some other kind of test. They didn't say what it was but it could have been something as simple as a visual inspection. I've read that it's very hard to make a perfect looking Eagle from tungsten though the counterfeiters will probably get better at it as time goes on.

I haven't bought any coins in a long time but next time I might go with something beside Eagles or Kruggerands.

It could have been destructive or uneconomical testing, though

dragoncar wrote:It could have been destructive or uneconomical testing, though

Re-reading the page at the URL for the Gold Balance that I originally posted I see that the person who sent in the coin became suspicious because of visual characteristics. To verify, it appears someone cut into it to reveal the tungsten underneath as shown in the photo, something you obviously don't want to do a good coin.

They also say in the article that they will be coming out with a new product for testing but it's been several years so apparently it isn't as easy as they thought.

These people also make physical and sound testers. Expensive, but if they work...
https://www.thefisch.com/

And there is a phone app for PM coin sound testing that looks pretty cool.
https://www.youtube.com/watch?v=HdcKEeKJb5U

I have started paying the small premium to purchase current year uncirculated gold Eagles. The dealer I buy from is an authorized U.S. Mint dealer. I am assuming this might offer some protection against getting a counterfeit coin.

Saw this today, though it's from August '16.

Gold Is Hot This Year. So Are Fakes
With this year’s surge in gold prices, many coin dealers are seeing a jump in forgeries; technology is making them harder to detect and easier to peddle
-- WSJ

on.wsj.com/2b0ZmBr

{hopefully the whole thread won't be diverted to getting around the paywall. You can do it, guys!}

I tried the usual way to get around the paywall, a google search of the title, but I still hit the paywall.

Here is an NBC News story that came up, though:
http://www.nbcnews.com/business/busines ... et-n591201

Oh shoot, I was going to start buying Eagles. I'm going to stick to Maple Leaves and Kangaroos.

I Shrugged wrote:I tried the usual way to get around the paywall, a google search of the title, but I still hit the paywall.

Here is an NBC News story that came up, though:
http://www.nbcnews.com/business/busines ... et-n591201

Hmm. It mentions improved technology, tungsten cores, lack of regulation in China, the usual stuff. An iphone app for the ring test. (I see the Fisch ringer is $89 USD. I might try the app first). Says that bad dealers are still more of an issue than fakes in one expert's opinion.

It does not mention everything the NBC article does, like the bogus bar codes and registration numbers.

What I really wanted to show you was this graphic. Maybe it's accessible through this naughty deeplink: (Edit: Nope. Darn).

I'm not worried about future gold purchases because I'll have a testing tool ready, but I shudder to think the random year krugs I already have at the bank could be fake. Hope not.

dualstow, can you print the WSJ article to a pdf file and then post the pdf here?

This could have the effect of depressing demand for gold coins. Or so I would think.

I Shrugged wrote:This could have the effect of depressing demand for gold coins. Or so I would think.

So now we should buy paper gold instead of physical???

No, but if gold coins become disreputable, something's gotta give.

The market is not dead yet. The 99.99% coins can't be counterfeited due to the density of gold. The lower gold content of Eagles and Krugerrands makes them vulnerable.

ochotona wrote:The market is not dead yet. The 99.99% coins can't be counterfeited due to the density of gold. The lower gold content of Eagles and Krugerrands makes them vulnerable.

Tungsten is almost identical in density to gold, so even 24k coins might be a problem.

But the ring test will still distinguish fake from real coins.

dualstow wrote:I'm not worried about future gold purchases because I'll have a testing tool ready, but I shudder to think the random year krugs I already have at the bank could be fake. Hope not.

If you are really concerned, there are more and more gold dealers that have x-ray frequency machines that can determine the content of your krugerrands. In my experience, the dealers with these machines have been happy to let me test my coins with them.

Interesting. I haven't seen the x-ray tests, but that would get right to the point, wouldn't it? I'll have to see if I can find one locally.
I think I'll try the iphone app, and if necessary, the Fisch ringer (89 bucks) in the future.

Gosh, would that be x-ray diffraction (XRD) analysis? I used to do that in college with minerals. That's a serious solution to the security problem.

I have Maple Leaf coins with the micro-engraving on the leaf side, it's really intricate and not possible to see in full detail without magnification. You'd think this would be impossible to forge well.

I bought my first maple this winter, a 2017 with that microengraving. Pretty cool. I'd buy more if they weren't so soft (pure). Price of being pretty.

I understand there is a potential for concern here, but it sounds a bit overblown. I buy from a guy who's been in business for 35+ years. I'm not too worried.

If a fake was good enough to pass by him to me, well, then it's probably good enough for me to pass on if there comes a time to sell! I will hopefully never know.

I'd heard maples were beautiful. I'd be worried about how they'd hold up during long term storage by a cretin like me, though.

I think I'm done buying physical gold, and this thread has helped with that decision - I just don't need to be worrying about counterfeiting, let alone storage & insurance issues. The rest of my taxable gold purchases will be Perth Mint certificates.

BTW Fidelity's bullion program is really worth a look for tax-advantaged accounts. They've reduced the storage fees. There are ~2% commissions to buy & sell, and storage (i.e. expense ratio) is 0.5/yr. Storage is in Nova Scotia and insured by Lloyd's of London. It's limited to IRAs, can't do it in a Keogh, but it's a really nice alternative to ETFs. I am thinking to take the plunge for the gold held in my Roth.