The latest Internet rumor seems to be that bars of tungsten wrapped in gold foil are being foisted off as gold bars. There are two things that should come to mind before dismissing this rumor. First, dealing with a reputable gold bullion dealer is important for the investor. Secondly, whoever starts these rumors has little knowledge of gold assays and other means of verifying that gold bars are truly made of gold.
Successful gold bullion dealers don’t get that way by cheating their clients. Cheaters get caught, or at least get complaints. Thus a Better Business Bureau report is a great idea for checking out a dealer before the issue of counterfeit gold ever comes up.
One of the oldest ways to check out gold goes back to Archimedes. The Greek Philosopher used the fact that less dense metals take up more space than gold of the same weight to prove that a crown was not pure gold. Scratching a bar and applying a drop of nitric acid would prove that the object was not pure gold if it started to fizz. In addition to this simple method, there are a number of very accurate, professionally applied tests to determine if a bar is gold bullion or not.
Buying gold bars from a reputable source or buying American gold bullion coins helps with identification and avoids some of the questions about whether bullion is pure or not.
An investor is typically interested in buying gold as a hedge against inflation or as a means of investment when the dollar devaluates. The same investor is typically not interested in being a chemist or detective, thus we are back to dealing with a professional and trustworthy gold bullion dealer. One can buy bullion coins from the US Mint, but the markup is up to nearly 30 percent above the spot price of gold.
Gold bars and bullion coins are commonly sold for prices slightly above the spot price of gold when bought a dealer or exchange. Buying from a gold dealer with a complaint free record beats worrying about having to do chemistry on every gold bar and coin that the investor purchases.
