Fake gold bars turn up in Manhattan

[Rygon]

http://www.myfoxny.com/story/19578206/fake-gold-bars-turn-up-in-manhattan

MYFOXNY.COM - In jewelry stores on 47th Street and Fifth Avenue in Manhattan, the important trust between merchants has been violated.  A 10-ounce gold bar costing nearly $18,000 turned out to be a counterfeit.

The bar was filled with tungsten, which weighs nearly the same as gold but costs just over a dollar an ounce.

Ibrahim Fadl bought the bar from a merchant who has sold him real gold before. But he heard counterfeit gold bars were going around, so he drilled into several of his gold bars worth $100,000 and saw gray tungsten -- not gold.

What makes it so devious is a real gold bar is purchased with the serial numbers and papers, then it is hollowed out, the gold is sold, the tungsten is put in, then the bar is closed up.  That is a sophisticated operation.

MTB, the Swiss manufacturer of the gold bars, said customers should only buy from a reputable merchant. The problem, he admits, is Ibrahim Fadl is a very reputable merchant.

Raymond Nessim, CEO Manfra, Tordell & Brookes, said he has reported the situation to the FBI and Secret Service.

The Secret Service, which deals with counterfeits, said it is investigating.

In March, gold bars filled with tungsten showed up in England. With New York now hit, it may mean an international ring is involved.

Just another sign that even physical gold can't be entirely trusted.

[RaTTuS]

https://bitcointalk.org/index.php?topic=110494.0

[FlipPro]

Can't fake a Bitcoin. 

[Phinnaeus Gage]

I wonder at what point they went into production.

[kokojie]

I wonder at what point they went into production.

Lots of Chinese factories are producing tungsten filled gold bars in the past few years, they are just flooding the market with them. It's impossible to detect without destroying the bar, unless one is equipped with expensive ultrasound or conductivity testing device.

[Ente]

Lots of Chinese factories are producing tungsten filled gold bars in the past few years, they are just flooding the market with them. It's impossible to detect without destroying the bar, unless one is equipped with expensive ultrasound or conductivity testing device.

I would formulate it rather "it's easy to detect with basic ultrasound testing". Never heard of a conductivity testing method though. "Expensive" is somewhat relative, with the value of those chunks of metal ;-)

Indeed an interesting twist!

Ente

[Phinnaeus Gage]

This story has made it rounds before: http://www.popsci.com/diy/article/2008-03/how-make-convincing-fake-gold-bars

and even here (among other links on this forum):

Isn't it easier or more familiar to most Europeans to move out of euros and buy up dollars? That is my thesis for dollar appreciation. It's the best of the worst in class.

Yes, easier mostly due to temporal availability/liquidity within the established infrastructure (i.e. "convenience"). Other currencies also benefit in relation to whichever region is under pressure at the time, so the principle you've outlined applies across the board. The Euro and numerous other currencies (as well as asset classes) benefited from USD depreciation during its time in the crisis spotlight.

That's the forced demand. Gold (with silver & platinum to lesser degrees) are in demand by choice. The Swiss Franc was experiencing this relentless demand because it was the only currency not being debased, but its much smaller quantity relative to the Euro and USD meant that its price would shoot up far more rapidly than the other two would decline. Such a rapid rise in currency value causes structural instability within the respective economy, and without anything else to alleviate that building pressure, the SNB intentionally devalued.

The only way to debase gold is with a composite tungsten core and a pile of hope that the buyer doesn't realize he's being duped...