In early 2008 it was reported that at least some of the gold bars in the vaults at the National Bank of Ethiopia were fake. The discovery was made when bars shipped from Ethiopia to South Africa were returned after they were identified as being gilded steel.

Gilded steel is a very unconvincing form of fake gold because the density of the iron alloy is significantly less. A steel bar identical in volume to the standard 400 troy ounce gold bars commonly used in bank-to-bank trades would weigh only 162.5 troy ounces (about sixty percent lighter). Anyone familiar with handling gold bars would easily identify them as counterfeit.

Even lead, a common heavy metal, is a poor substitute as it is only 59% the density of gold. One of the things that historically made gold so attractive to be used as money was its unmistakable density.

Nowadays we know of several metals that have similar densities to gold, such as the heavier platinum-group metals. However, using these metals to produce fake gold is unprofitable due to their high cost.

There are two metals that are suitable, from both a density and economic perspective, for manufacturing fake gold - uranium and tungsten.

These metals aren't without their give-aways either. Different chemical and electro-magnetic properties exist. Uranium is of course radioactive. Tungsten is extremely brittle - the exact opposite of gold. Additionally, tungsten has the highest known melting point of any non-alloyed metal at 3422 degrees Celsius, making it difficult to work with. However, it appears that at least one high-temperature furnace is producing gilded tungsten products.

A Chinese company called Chinatungsten is advertising imitation gold merchandise on its website. The following quote is taken directly from their Tungsten Alloy for Gold Substitution page:

This raises a few (somewhat rhetorical) questions. What kind of customer is this company looking to sell its imitation gold products to and for what purposes are they intended? Furthermore, what exactly are the "more innovative applications of tungsten products" that this company is hinting at?

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© 2009 DollarDaze

ABOUT THE AUTHOR

Mike Hewitt is the editor of DollarDaze.org, a website pertaining to commentary on the instability of the global fiat monetary system and investment strategies on mining companies. His website also provides a no-cost market data feed service with up-to-date quotes on currency exchange rates, commodity prices and major indices. Mike can be emailed at mikehewitt@hotmail.com.

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Comments (7)

Posted by John Smith on November 17th, 2009: You Know What will be funny(not too), is when it is found Kitco and the US Mint (OUTSOURCE USSA) and most every coin dealer has been buying Their (fake) coins also,not just 400 oz bars but coins......Read their website and see all the fake stuff (undetectable,except by cutting open or perhaps x-ray absorption comparison at specific energies)If such has already occurred would there not be a huge desire to NOT FIND OUT ABOUT IT,especially for us peons to not find out.....The corrupt govts will have the REAL stuff and us peons get Fleeced and they get our money too,to buy REAL GOLD WITH.....Pretty Funny and Smart of the Worlds Corrupt GuvGoons I bet this is what Hillary set up with them a while back.....Jokes on us..........

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Posted by John Smith on November 17th, 2009: By the way Gunshows, all over, are selling fake silver coins cause I was stupid enough to buy some.Melted like solder when touched to electric stove and some other ones rusted....I thought I was being careful enough after that, but after going to the chinatungsten website linked here I am not so sure.... Even the ones I bought were from "reputable" dealers/sellers,or so I thought.What does caveate emptor mean????????? Bet this is ALREADY a very BIG SCANDAL,as in very,very big.

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Posted by Todd R on November 13th, 2009: Wow, pretty brazen advertising "Hey, we counterfeit. Got a physical gold problem? Need to trick a counterparty?"

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Posted by PJ001 on November 13th, 2009: Ringing the bar or using acoustics should reveal the tungsten bars. An electrical test of resistivity would not be practical since it would not be measurably different due to most of the current passing through the outer cross-section of the bar. Science may work, but it is not always correctly applied.

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Posted by Calum Coburn on November 12th, 2009: Gold covered tungsten bars can easily be tested without damage to the bar. Just pass a current through it to test it's conductivity. There are other tests too - science is a wonderful thing when you use it.

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Posted by TheHolyCrow on November 12th, 2009: I was in ChinaTown in NYC not too long ago. Stands along the sidewalk offerred fake silver coins from the Phillipines and Eastern Europe. Dates were from the mid 1900's. GOOGLE "CHINATOWN FAKE COINS" and you will see what I mean. Seems that there are a lot of Chinese crooks in the world.

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Posted by Steve on November 11th, 2009: Interesting article. These tungsten-gutted bars would have passed Archimedes' density test, and because the bars are coated with pure gold any kind of surface test won't show them as counterfeit. Only way to be sure is to cut up your bars.

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Tungsten as a Gold Substitute by Mike Hewitt

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