Chinese Export: Fake Gold Coins
As savvy investors look for ways to diversify their portfolios in uncertain financial times, news comes that counterfeit gold and silver coins are flooding the market. According to Rod Gillis of the American Numismatic Association, the influx of fake coins is “a very serious problem and it’s really scary. With improved technology, the fakes are getting better. It’s gotten to the point where even people who deal with coins all the time may not be able to recognize a counterfeit coin right away.”
The increased popularity of bullion coins like the American Eagle has created a gold mine for forgers. In the beginning, the quality of fake coins was readily detectable, but the counterfeiters have become more astute, resulting in more authentic-looking coins. The increase in fake coins is potentially a multi-million dollar issue for investors.
An image of the coin is taken, then a graphic design program is used to enhance the design before sending it to an engraving machine that cuts the die. The coins are made from a base metal, like tungsten, and plated with a small amount of gold so it passes the acid test that indicates gold. Forgeries that are well made even have a similar weight to an authentic coin. There is no law in China against making replica coins as long as they are sold as replicas.
Counterfeiting issues go beyond just the coin and involve coin holders with bogus barcodes and registration numbers. The bogus coin holder makes it appear that the coin has been authenticated by a reputable grading service. Doug Davis, founder, and president of the Numismatic Crime Information Center believes, “The bad guys are buying these fake coins by the hundreds on websites like Alibaba.com.” The fake coins are then unloaded on eBay or Craigslist or even ads in local newspapers.
Local police departments do not have the knowledge necessary to understand whether a crime has been committed and while the Secret Service is becoming more proactive in coin forgeries, it is up to the investor to protect themselves against counterfeiters. To protect themselves, investors need to shop at a reputable dealer who guarantees what they sell. The U.S. Gold Bureau is proud to feature the Ed Moy Signature Series Gold American Eagle Proof 70 coins, gold bars, silver coins and bars, other precious metals, to help clients diversify their investment portfolios with precious metals and within precious metals. Gold and silver can now be put into your IRA account. Speak directly with an Investment Specialist by calling (800) 775-3504.