How to Spot Counterfeit Gold

Gold dealers are usually reputable and offer quality products, but that doesn’t mean some won’t have fake gold, whether they know it or not. There are safeguards the buyer can use to avoid counterfeit products, Olivier Garrett points out in Forbes.

One way is to buy gold bars and coins from dealers, mints, and refineries approved by the London Bullion Market (LBMA), an international organization that sets the standards for global precious metals.

Alert: US Dollar Expected to Devalue During Imminent 'Currency War'

When buying gold from local dealers, there are ways to inspect the items to spot counterfeit gold:

1. Markings — Authentic gold pieces bear the markings of its producer, according to JM Bullion. The markings also include the product’s weight, purity, and serial numbers. Coins will show the mintage year and denomination. Stamps on gold chains will contain numbers followed by the letters K, KT, or KP to indicate the karat of the piece, according to Jewelry Notes. No markings on any piece indicates fake gold.

2. Discoloration — When it comes to gold jewelry, such as gold chains, discoloration may signal counterfeit gold. Jewelry Notes recommends looking for spots where the gold plating has worn off, revealing the underlying metal.

3. Weight — Precious metals are weighed in troy ounces. A 24-karat, one-ounce coin weighs one troy ounce (31.1 grams) and should feel dense and heavy, says Garrett, who advises bringing a digital scale to the local shop selling gold. The coin should not be lighter or heavier. Gold bullion will have the weight inscribed on it to compare the actual weight.

Income Revolution: The Retirement Secret Becomes a Movement

4. Appearance — Inspect the gold piece for grainy appearance or imperfect imprinting and lettering. Check the dimensions of coins on an official mint site. If the coin is too large or too thick, it could be fake gold. Coin designs also have edge finishes associated with the design. The edges could be smooth, have lettering, or contain little ridges. Examine the texture of the coin to make sure it fits the coin design and doesn’t have uneven ridges.

5. Price — There’s the adage, if it’s too good to be true, then it probably is. Reputable gold bullion and coin dealers sell products at 1 to 10 percent or more over the gold spot price to account for transportation costs, overhead, and profit. If you’re offered gold below the spot price, there are either hidden fees or the gold is counterfeit.

6. Magnetism — Real gold won’t stick to a magnet. Gold and silver are not magnetic. If the gold attracts to a small magnet, it’s a counterfeit piece.

Special: You Won’t Become a Millionaire Until You Read This Book . . .

• How Does the Fed Affect Gold Prices?
• 8 Best Resources for Tracking Gold Prices