• About Us
  • Our Bullion Products
  • How To Buy
  • Depository Services
  • News & Reports
  • FAQs
  • Contact Us
  • Blog
About Perth Mint Bullion Blog

You are invited to engage with senior representatives of The Perth Mint, including CEO Ed Harbuz, on The Perth Mint Bullion Blog. Use the comments section to post your views and/or questions in response to our regular articles, and join a vibrant community of people who share an interest in superb quality gold and silver bullion bars and coins.

Our Blog Disclaimer.

Our Comments Policy.
Our Copyright Policy.

Popular Posts

2012 Australian Gold and Silver Bullion Coin Program Unveiled »

Fake Bars - The Facts »

New Video Posts »

Perth Mint Depository Fear Index »

1oz Year Of The Rabbit Coins Sold Out »

Blogs We Like

Peter Schiff's Video Blog

Gainesville Coins Blog

Bullionmark Blog


Goldcore Blog

Perth Mint Bullion BlogSubscribe
« Back to full list

Fake Bars - The Facts

Topics [ gold bullion bars ]


On the weekend the gold blogosphere picked up on an ABC Bullion blog post about a gold bar cored with five tungsten rods, including Zero Hedge, Reuters, Screwtape Files, Bullion Baron, and Jo Nova.

The ABC Bullion blog was based on an email from MKS/PAMP sent to their distributors about a fake bar that a UK scrap dealer had received. The dealer thought the bar was suspicious due to a weight discrepancy and as a result they cut it in half, revealing five tungsten rods inside.

Typically, Zero Hedge over play the significance of the story with this statement: “So two documented incidents in two years: isolated? Or indication of the same phenomonenon of precious metal debasement that marked the declining phase of the Roman empire.” Other bloggers, such as Felix Salmon of Reuters, have been quick to speculate that such fakes may be common and present a “serious tail risk for anybody in the physical-gold market.”

In the experience of The Perth Mint, such fakes are a rare occurrence. In the 20 years our Refinery Manager has been working at the Mint, he has never seen a fake bar come through our operations. If investors buy coins and bars made by reputable refiners and mints and from a reputable dealer they are highly unlikely to be sold fakes.

Reputable dealers are familiar with how the common brand name bars and coins should look and thus fakes are unlikely to be resold. Note that the dealer referred to in the ABC Bullion story suspected the bar and cut it before it even reached the refinery.

As to the frequency of fakes, note that the previous “incident” that Zero Hedge referred to was this post of January 2010. As I pointed out in on my personal blog at the time, the Argor Heraeus video showed a fake bar received more than ten years prior. So sorry Zero Hedge, this is not two incidents in two years. Argor Heraeus said that “counterfeit bars are extremely rare, our colleagues from the foundry cannot recall a single instance in the last years in which such a bar was delivered to Heraeus for processing.” This agrees with The Perth Mint’s experience.

In the retail market turnover of physical product is relatively high. This is because retail investors do tend to exhibit herding behaviour, which means when there is selling it usually overwhelms any retail buying demand at that point in time. The end result is that in a net selling situation dealers do not sit on gold due to the high holding costs and uncertainty as to when buying demand will return, so they liquidate that net selling excess back to refiners, where it is melted.

Even in the professional market, which deals in 400oz bars, there is a fair bit of turnover. While central bank holdings are quite stable, large bars held by private investors are traded and ownership changes often. As a result, there is a good chance a bar will eventually be melted for use by a jeweller, mint or refiner and as such there is a high probability of any fakes being caught out.

In the case of The Perth Mint, we melt every non Perth Mint bar and coin we buy back. We also melt a fair number of our own coins and bars if they are too old or damaged to enable resale. The point is that with such turnover of physical, the lack of fakes appearing in our and Heraeus’ operations indicates to us that fakes are few and far between.

With regard to identification of fakes, the most reliable non destructive testing method is ultrasonic and would easily show any insertions. XRF and other tests generally do not penetrate very far into the surface of a bar, so are only good for testing plated bars. This link provides an insight into the sort of testing performed at refineries and for those interested in the technical aspects here is a quote from KK&S Instruments:

“The 1090 Flaw Detector allows you to look into the Bar for voids/defects as well as UT velocity which is determined the products elastic modulus i.e Tungsten Velocity is 5183-5460m/sec and Gold is 3,240m/sec. For example if you calibrate for Au then the testing Tungsten bar of the same thickness, the UT thickness would read approximately half the actual because of the speeding-up of the sound through the Tungsten.”

GoldMoney also has a good video on the ultrasonic testing they perform on their bars. Interestingly, they only found ten bars out of 1,377 with “inconclusive scans were identified but assays of these bars confirmed they contained the gold content stamped on the bar.” [link] These bars are 400oz professional market bars and is yet more proof that fakes are not common.

Investors buying recognised brands from trustworthy dealers should not have any cause for concern. For those looking for more information on the various brands and bars and coins available, and what they should look like and their specifications, this website http://www.goldbarsworldwide.com/ is a good reference site to bookmark.

Blog DisclaimerComments PolicyCopyright Policy

Comment »


  • March 27 2012

    Rae says:

    Thanks Bron
    This article was very informative. I believe the mainline Media distorts  most everything.
  • March 27 2012

    Ed_B says:

    "In the experience of The Perth Mint, such fakes are a rare occurrence. In the 20 years our Refinery Manager has been working at the Mint, he has never seen a fake bar come through our operations."

    On the other hand, just how likely would it be that a counterfeiter would bring a fake bar to the very people who would be most likely to recognize it as such?  Counterfeiting of just about everything is going on in China these days, whether that be Apple iPods, American Silver and Gold Eagles, or Canadian Gold and Silver Maples.

    I most definitely agree with the part about buying from reputable dealers.  Many of them either are mints or buy directly from them and have a lot to lose if they resell any fake precious metals.  They also have the equipment on hand to test any suspicious precious metal products that do not seem to meet the size and weight standards of that particular product.

  • March 27 2012

    Bron Suchecki says:


    It is unlikely that a counterfeiter would bring their bars to a refiner or mint. However the people they would sell them to would eventually sell them and at some point those buyers (who don't know they have a fake bar) would sell it back to a knowledgable dealer or refiner, where it would get picked up.

    I note the following from Forbes contributor Tim Worstall (http://www.forbes.com/sites/timworstall/2012/03/26/the-drilled-gold-bars-filled-with-tungsten/):

    "As to this being a common occurrence among good delivery bars I’d put it down somewhere near zero. There’s just too much turnover of bars through the refineries for this to be possible."

  • March 27 2012

    Jon says:

    Bron, are ag and au bars that are sold back to the Perth mint ALL tested before being resold?
    Can buyers request new stock only, if making a purchase?
  • March 27 2012

    BenBernanke says:

    Diluted gold bars aren't at the top of my worry list.  Diluted paper currency is.
  • March 28 2012

    andrew says:

    Take a good look at those bars,They weren't cut.
  • March 28 2012

    Roy Cobden says:

    With all the paranoid and/or cynical commentary about tungsten core bars in the blogosphere it's nice to see feedback like this from a reputable high volume dealer.

    That said I'm still not going to buy any cheap "gold" off of Craigslist...
  • March 28 2012

    ed says:

    hi, Bon:

    what about fake silver bars? any insights? thank you.
  • March 28 2012

    Bron Suchecki says:

    Jon, we check all product we buy back, but not to the extent of ultrasound testing, given we deal in them all time our guys are more sensitive to discrepancies many would not notice. You can always ask for new stock if you want.

    Ed, my article applies equally to gold and silver, we haven't seen any silver bar fakes. This website does have a picture of a fake silver bar http://www.bullionanalysis.com/ so crooks will try but I think gold has the better payoff so would guess silver is less likey to be a target.

  • March 29 2012

    Steven Williams says:


    I agree that current fake bars are probably very rare. However, I posted the following photo of a fake silver bar on www.CycleProOutlook.com in 2003 (see photo here: http://cycleprooutlook.com/Charts/SP500/BogusBar.jpg). This particular 100 oz silver bar came out of the 1980 Hunt bull market. The dealer that allowed me to take the photo said that it was only in the very final stages of the blowoff rally that he and a few other dealers found fake bars like this.

    I think the take-away message here is that the current price (of gold or silver) is not yet high enough for counterfeiters to take the risk of making fake bars. But once the market price reaches high enough, fakes may become less rare.

    The 100 oz bar in the photo was very well constructed and was not easily detectable, visually. The dealer said the only reason he was suspicious was that the "patina" of the bars surface was "a little inconsistent", something that a seasoned dealer could readily notice but a novice might not.

    Once the market price (of gold & silver) rises high enough, we may hear more stories of fake bars as the risk/reward opportunity increases for conterfeiters.


  • March 29 2012

    Bron Suchecki says:

    Thanks for that Steve. Crooks go where the money is, which means following the mass market and what they are interested in. When we start to see real mainstream interest in precious metals then I won't be surprised if we start to see fakes appearing as your dealer said happened in the 1980s.
  • March 30 2012

    Bukko Canukko says:

    Add my thanks for a reassuring essay. I read ZeroHedge because the Tylers keep me somewhat ahead of the curve pertaining to all sorts of events, not just financial ones. However, I recognize their tendency to hyperventilate. Your explanation about the turnover and frequent checking of bars seems like a rational explanation of why I can trust that a gold bar is what it says it is. Not that I'd ever be able to own such a thing, of course.

    P.S. Mates, I'm still a bit peeved that when I was out there in early 2009 with cash in my pocket to purchase 200 silver koalas, the Mint only had 170 in stock to sell me. However, I have been able to get some mileage out of the incident by telling people that I bought out the Perth Mint's entire stock of silver coins, eh?
  • September 19 2012

    Isaac says:

    I am a dealer in NY & I have seen the latest fake Pamp ten ozt bars.

    They look real & the reason is that they are real & the person hollowed out the inside & JUST REPLACED THE GOLD. I am worried about this & am looking out for ways to authenticate bar. If I cant come up with a way how can I continue to buy from the public when I wont know if the bar is real? On the other side why would someone want to buy if they cant sell?

  • September 20 2012

    Bron Suchecki says:


    An ultrasonic tester would have picked up this fake, see http://www.goldmoney.com/gold-testing

    I think this will encourage the public to prefer Tamper-Proof carded products like our minted bars http://www.perthmintbullion.com/au/Buy-Gold-Bars/1oz--Minted.aspx?productId=100
Comment on this post