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Buyer Beware: Fake Gold Epidemic Emerging

Wealth Daily's Weekend Edition

Written by Brian Hicks
Posted September 8, 2012

The 2012 Summer Olympics have come and gone, and you probably learned that true gold isn't easy to come by — even for the world's most celebrated athletes. 

A Gold Medal is only 6 grams gold — a measly 1.34%.

Copper, silver, and other metals make up the rest.

And Olympic Gold Medals aren't the only fakes out there...

Investors are riled up this year, as new cases unfold daily revealing fake gold bars being pawned off as the real deal.

Gold's Gilded Age

In March, UK media coverage exploded with a disturbing phenomena: gold bars filled with Tungsten instead of pure gold.

Gold owners have been shocked when they've attempted to cash in their gold, expecting a small fortune... and instead walked with a fraction of what they expected.

It's a real shame, but these are hard times and gold is perhaps the hottest of all commodities on the market...

And it's about to skyrocket in value yet again.

Gold's Recharged Bull Market

Christian DeHaemer delivered Wealth Daily readers some interesting news on the gold front this week.

A serious production delay in the gold market is under way after 34 miners were killed by police during a strike at Lonmin's Marikana platinum mine in South Africa, the world's third largest gold-producing nation.

Recent gold mining strikes have had a big impact on the price of gold bullion.

Add to that Bernanke's plans for QE3 (be ready for the Fed's next meeting to conclude on September 13, and they are expected to officially announce the next round of quantitative easing) and the worsening financial situation in Europe...

Experts and analysts have little reason to doubt gold is about to surge to record highs.

The Bad News

That's great news for gold investors — but not so great for those who lack experience when it comes to buying the yellow metal.

A surge in gold demand often leads inexperienced investors to buy for the first time... only to find out their precious purchases are tainted with less valuable goods, as heightened demand also beckons scams and fraud.

Since 2011 there have been hundreds of cases of Chinese counterfeiters.

These people openly brag about producing over 100,000 fake U.S. Silver Dollars per year — per counterfeiter in some cases. In fact, as much as 10% of China's GDP is a direct result of counterfeiting!

Fraudulent dealing can be catastrophically disastrous for investors who have put a sizable percentage of their net worth in counterfeit precious metal coins and bars.

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Avoid the Counterfeit Trap

Even experts have been fooled by fake gold.

But you can avoid falling into that trap.

Just follow these ten tips compiled by the Gold Bullion Pro

1.) Look at the seller feedback and forums if possible.
If you don't do your homework, you could pay the price later.

2.) Ask for an assay test.
Do not trust a dealer who is not willing to wait for the test do be completed.

3.) Third-party specialist verification
Make sure the third party is reputable.

4.) Insist on seeing the certification.
If the seller isn't willing to show you their gold's certification, don't buy.

5.) Use only reputable dealers.
Use only the trusted dealers with a respectable business history.

6.) Insist on only stamped and minted precious metal products for small amounts.
When buying small amounts of bullion, only choose those bars that are stamped and have serial numbers.

7.) Impartial grading
When purchasing bullion via the Internet, ask for documentation on the impartial grading of the bullion products. Legitimate dealers should have this form of certification.

8.) Slabbing
Make sure the slabbing and the coin go together. Fake gold generally does not include slabbing.

9.) Test using a magnet.
True gold is not magnetic. It should not react to a magnet at all. If it does, it's fake.

10.) Evaluate complaints and negative feedback about your dealer carefully.
When it comes to your dealer, don't risk even a single bad review mentioning fake gold. Find another dealer instead.

As Q3 looms, it's important to prepare yourself and your portfolio for the continued decline of the dollar.

Precious metals offer a good hedge as the Fed fires up the printing presses yet again — but it's important that you don't just load up on gold blindly...

Educate yourself on the market. Learn how to detect a fake gold bar for yourself before you visit a dealer. Keep these ten tips on hand when you go to make your purchase... and only buy from trusted dealers.

More advice on how to sift through scams to find safe, consistent wealth below.

Farewell for now,

Brittany Stepniak Signature

Brittany Stepniak

Brittany Stepniak is the Project Manager and Editor for the Outsider Club. Her “big picture” insights have helped guide thousands of investors towards achieving and maintaining personal and financial liberties while pursuing their individual dreams in lieu of all the modern-day chaos.

*Follow Outsider Club on Facebook and Twitter.

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