Even with all of today’s modern anti-counterfeiting technology – such as holograms and raised printing – fake currency is still alive and circulating.
Just this year a couple in Texas was nabbed for a precious metals scam in which they were selling fake silver bars to victims on Craigslist. Apparently they were trying to pass off silver-lined base metals as the real deal until a victim used the acid test to call their bluff. The takeaway lesson: Don’t buy precious metals on Craigslist.
The counterfeiting problem isn’t just limited to those gullible enough to fall for a Craigslist scam though. The market for rare coins is thriving, and even the U.S. government is trying to crack down on the growing threat of copycat coins.
A few months ago, Congress passed a law criminalizing the sale of imitation coins that aren’t clearly labeled as a “copy.” This new law is a direct response to the flood of fake antique gold and silver U.S. coins inbound from China lately and was pushed through by Rep. Jimmy Hayes (R-La.).
“They’re very deceptive,” said Rep. Hays of the replica rare and antique coins. Hays is a fellow coin enthusiast who sold his $1.2 million childhood coin collection in 1990 to help fund his Congressional campaign. “I assure you there’s no way to tell if it’s good or not. You’ll never suspect.”
In fact, any bullion product you can name likely has a Chinese counterfeit version somewhere in the world. These counterfeiters typically use 1 of 2 techniques to produce fake gold or silver bullion:
- Masking coins and bars made of base metal alloys with a thin outside layer of gold or silver; or
- Selling hallowed out gold or silver bullion with thicker outside covers and filled with tungsten, lead, copper or nickel.
Watch this video to learn more about the growing Chinese counterfeiting problem:
How to Spot a Fake Coin
Though counterfeit coins can be nearly impossible to spot on appearances alone, there are methods of testing whether or not the precious metal content of a coin is legitimate. Here are several effective ways to tell if a coin is fake:
- Magnetic Test: Gold and silver are non-magnetic elements. So if a bullion bar or coin sticks to a magnet, it isn’t real. However, note that certain fakes can pass this test as well so it is best to pair it with a secondary testing method.
- Ice Test: Simply fill up a cup with some ice from the freezer, drop the coin in and see what happens. If it’s real, the ice should start melting immediately. This test works particularly well with silver because it is the best conductor of heat, which is why it is commonly used in electronics and increasingly for solar energy.
- Dimensions Test: Use an electronic scale to measure the weight, diameter and thickness of the coin in question. The specs and weight should closely match the dimensions specified by the mint – within a tenth of a gram. This test only applies to sovereign coins from government mints.
- Ping Test: One neat feature of gold and silver is that it always makes a certain high-pitched ring when struck against another metal. To hear it, place the coin on your fingertip and lightly tap it with another coin. It should make a high-pitched ringing noise. Use this online generator to mimic the frequency your coin should make so that you can compare.
There are lots of other methods for testing the quality of a coin. It’s best to avoid acid and chemical-based tests that may damage or tarnish your coin.
Hands down the best way to avoid coin scams and make sure your gold and silver bullion is legit is to buy from reputable dealer.
As a premier provider of international and domestic bullion, currency and numismatic coins, Provident Metals provides our customers with the highest quality precious metal bullion on Earth. We’ve been a major player in the investing game for a while now, and we have a quite a sterling reputation in the industry.