Fake gold bars out of tungsten a counterfeit story

Short-term investments are very bullish, erratic, unpredictable and undependable. But, long term investments are, relatively, considered safe and reliable. Precious metals like gold and silver are considered to be true money, and governments have been bastardizing precious metals since the night of time. It's all about printing fake money anyway. Even as stocks were losing their value, gold was marching steadily, increasing by five percent in US dollars.

However, this 'buy and hold' strategy might not work anymore as the sub-prime crisis has shaken this belief in the long term investment mode. Now, has gold joined the bandwagon of safe long-term investment going awry by treading the path of the sub-prime crisis?

The counterfeit story
This October, bankers in Hong Kong were in for a rude shock when they discovered some gold bars from the US to be actually gold plated tungsten i.e., fake gold bars. Acting fast, the Chinese officials found the perpetrators within hours. It seems that fake Tungsten blanks, between 1.3 and 1.5 million 400 oz, were manufactured in the US about fifteen years ago during the Clinton administration. Said to have been done by a very sophisticated refiner, 640,000 of these tungsten planks were gold plated and shifted to Fort Knox. The remaining also gold plated, but sold into the international market. (Fort Knox , as you may be aware, is the United States Bullion Depository, where the official gold reserves of the federal government are stored. This depository of about 4,603 tons (4 176 metric tonness) is the second highest gold depository in the US after the Federal Reserve Bank of New York's underground vault in Manhattan (5,000 metric tonness of gold). Whoever pulled this one on the gold bars had connections inside the government, big banks and also a top-of-the-line fabrication facility. For, counterfeit is not something new for the US government, it did this is 1964 when zinc dimes clad in silver were introduced. That's why the pre 1964 coins are valued more. Elsewhere, early this year, another counterfeit story made rounds as some of the gold bars in the vaults of the National bank of Ethiopia were found to be gold plated steel. It made news when the shipment of gold was returned by South Africa. It only could have been the work of a genius as fake gold bars made of steel are among the easiest to detect as they are lighter. Among gold coins, 22k Gold coins such as Krugerrand, are less likely to be counterfeited because the density of 22k gold minted from gold alloy that is 91.67 percent pure, is far apart from that of tungsten. Tungsten has the same density (19.25g/cm3) as gold, so a fake bar is indistinguishable by weighing it. In comparison the density of pure 24k gold is within 0.26% of tungsten.

Physical comparison of 24k, 22k gold and tungsten
Gold Purity Density
(g/cm3) Density difference
from tungsten Dimension difference of bar
with same weight
Tungsten 19.25 0%  0% 
24K Gold 19.3 0.26%  0.0017%
22K Gold 18.43 4.25%  0.0077%

Source: Gold-quote.net
The table above illustrates that although tungsten's density is within 0.26% of pure gold making it nearly impossible to detect, it is nearly 5% heavier than the 22 karat gold of Krugerrands. The dimension differences of a counterfeited 22 karat coin would have to be 6 times larger than those of a pure gold coin to weight the same. So one is 6 times more likely to detect a counterfeited 22k coin or piece of jewellery than a counterfeited pure gold bar through simple measurement.
So just by weighing the coins you would tell a difference. So why aren't so many fake coins in the market? Coins are more liquid and circulated; they change hands more readily so it's more likely a fake one will be detected. Gold bars on the other hands are given as little exposure to human hands as possible (fear of theft). They are conveyed in armored trucks, their serial numbers are exchanged and they're stacked away in a vault never to see the light of day again. Their credibility relies on a piece of paper and paper is easy to forge. Also the labor involved in making fake coins does not make it as worth a criminal's time as a gold bar. (it costs $50,000 to make a fake $400,000 gold bar because of the real gold coating and the labor). Gold coins have lots of details including the number of ridges on the sides etc..and there are a lot of numismatic aficionados out there to tell a real from a fake.

Tungsten: the perfect gold substitute
Tungsten is a steel-gray metal found in shallow rectangular deposits. It has a very high melting point and is brittle making it hard to work with when it's raw. Today, companies like Chinatungsten use Tungsten in jewellery making and in memorial coins. Chinatungsten even offers tungsten alloy as gold substitute. Chinatungsten even brags, on its website, about being an "accustomed experts in fabricating tungsten bars and discs coated with gold."

It's a large scale operation, indeed. The question is since only high-end refineries could manufacture the counterfeit, could it be them? Not that the Chinese have ever made fake copies of anything. And incidentally, China is the leading producer of Tungsten in the world.

Counterfeit coins and gold trading
Well then, on to the impact of counterfeit coins on gold trading: GLD ETF is the case in point. GLD ETF ( StreetTracks Gold Shares), was born just five years ago in November 2004 and is the first ETF in the US to allow stock traders to directly gain price exposure to a physical commodity (gold and silver). Stock investors could buy assets to track the price of gold, get immediate and easy knowledge about gold then speculate-buy or sell. It is the second largest in the world behind SPY, with a mammoth 1117 metric tonnes of gold bullion in trust worth for share holders. GLD, in fact has more gold bullion than the central banks of China, Switzerland, Japan, Europe and India.

The influence of GLD is such that its trading activity can affect the global prices directly. So, are they going to drill all their bars to tell the real ones from the fake ones? Are they going to tell anyone if there is even just one fake gold bar somewhere? What will happen to investors billions if it turns out they hold fake gold? GLD finds a distinction between 'gold' and 'investment in gold'. And it's not clear what these investments in gold are, and they could be anything even remotely related to gold. It leaves none the wiser as there are no independent third party audits. The value of the fund will have to be de-pegged from the value of real gold if it doesn't hold real gold and will likely collapse and with it the billions in retirement investment. People affected would be more as there may be more than one person owning the same asset and hence no automatic right to physical holding.

 http://www.ctia.com.cn/TungstenNews/2009/21469.html

Announcement of “Tungsten as a Gold Substitute”from Chinatungsten Online

Chinatungsten Online is honored to be paid much attention recently, meanwhile we feel so sorry that some people are misunderstanding our company and our products.

As Mike Hewitt commented our company and questioned us on www.dollardaze.org, www.Howestreet.com, www.safehaven.com, www.24hgold.com/english/home.aspx, and www.numismaster.com, etc., we felt insulted and we have to make an announcement for this case. We hope these websites and many other websites that have the similar comments can link to this announcement to help restore Chinatungsten Online’s reputation.

In order to be known better, we would like to introduce our company:

Chinatungsten Online specializes in manufacturing and offering pure tungsten, tungsten alloy, tungsten carbide and tungsten related products for over 2 decades. As a professional company in tungsten business, for the sake of surviving in the harsh international competition and enlarging our market, Chinatungsten Online is always studying and innovating tungsten products depending on their qualified tungsten products, advance technology, excellent credit, modern facilities and scientific management, and with our Chinatungsten Online employees’ concreted efforts and efficient operation, we have obtained ISO9001 Certificate several years ago.

Owning to its excellent properties of tungsten such as high density with small volume, high melting point, excellent hardness, superior wearing resistance, high ultimate tensile strength, high ductility, it always be used such as darts, golf club, fishing weight, ballast in yacht, racing car, and aircraft; Also because of its properties like high temperature resistance, low vapor pressure, nuisance free, non-toxic and environmental friendly, good corrosion resistance, wonderful shock resistance, it can also used as heat sinks, crankshaft, counterweight in oil drill, mine exploitation; due to the properties of high radiation and/or adsorption capability, it normally adopted in the medical and industrial radiation shielding equipment such as source holder, collimator, isotope container, nuclear syringe. Its reduction in press down-time, high impact resistance and crack resistance make it suitable for extrusion die, etc. Depleted Uranium was used to be a very effective weapon, but it can cause severe pollution. Thus, tungsten is now widely used as a substitution in some parts of military products nowadays. As you can see, tungsten alloy products have many applications; gold-plated tungsten is just one of main field. Chinatungsten Online is studying and researching tungsten area for more than 20 years, and now have gained a great number customers home and abroad. All our products are for the convenience for human being’s better life and suitable for the world sound development. More details, please visit our website www.chinatungsten.com, www.tungsten-alloy.com. Meanwhile, we can offer pure tungsten, molybdenum, tungsten darts，bucking bar, tungsten wire, tungsten powder, tungsten heater, etc.

As Mike Hewitt asked “What kind of customer is this company looking to sell its imitation gold products to and for what purposes are they intended?”, we would like to say our company is not trying to imitate gold products and it is not sold as real gold but as souvenir or present or it can be greatly used in the industry business or even a way to defense gold thieves.

Tungsten alloy products with gold plated could be regarded as the special present for some fields. If you are in an international enterprise, a broker in stock, manager in a big insurance company, you can use our tungsten gold–plated bars engraved with your company’s name as souvenirs or present to your VIP customers. It is a very decent present without costing too much, and also could attract more customers for your business.

We also provide tungsten bar and tungsten ring plated with gold or platinum. It can be a very delicate and beautiful present for your lover, husband and wife, or for your golden jubilee. Since tungsten alloy bears a special property of longevity and high durability. In China and many other Asian countries, when tungsten is utilized to make rings, it always implicates the love between lovers or couple could be everlasting. Its hardness makes it ideal for rings that will resist scratching, are hypoallergenic, and will not need polishing, which is especially useful in designs with a brushed finish. Especially, we can offer engraving service, the boyfriend or husband can engrave their name or the words they would like to express to their lover. It could be quite interesting and romantic.

Tungsten gold-plated bars are the best choice if you are a gold dealer and attend some trade fair or put your gold products in the showcase. In case your real gold being stolen, you can choose tungsten gold-plated bars to reduce any possible loss.

Besides, tungsten alloy products could also made as gold-plated tungsten wire which posses a better electric conductivity, and contribute greatly to the world industry development. Also it saves the energy and poses no pollution threat to the environment and thus to achieve a sustainable development.

Here we would like to confirm that we always don’t want our clients use our products for some illegal purposes. However, we can not deny some of our clients buy our gold–plated tungsten bars for the illegal purposes, even maybe some national bank gold vaults have our products, but it is unfair to question our products, even our company. If the Iraqi civilians are killed, should we blame American’s anti-terrorism war? If someone died because of war, should we close the entire ordnance factory? If someone is murdered, should the one who sell the knife be published? That’s definitely ridiculous.

That article also mentioned “what exactly are the ‘more innovative applications of tungsten products’ that this company is hinting at?”, we are not hinting anything, and we think Mike Hewitt know little about the common sense of tungsten industry, let alone powder metallurgy technologies, refractory metal, tungsten alloy products. His comment has greatly harmed our reputation and misled many people. And he is irresponsible for those individual who loves gold and the whole country and may cause numerous problems to the financial world.

We have demonstrated most of our products clearly in our website http://www.chinatungsten.com/. And also we have introduced a lot in the above paragraphs. Chinatungsten Online offer tungsten products applied in the above applications, and we offer gold-plated tungsten products just for the handicraft or souvenir. Although the gold-plated tungsten is a fake gold, it is of high quality tungsten products.

If you have any questions about our products, please email us to sales@Chinatungsten.com.

And we wish to cooperate with any media or website that really care about the financial market order and tungsten industry, and Chinatungsten Online can offer free information about our technologies, latest news, and most advanced invention of tungsten products because we are now running the world’s biggest e-news website about tungsten industry www.ctia.com.cn for more than 10 years. You may find as much information as you like.

So this announcement is firstly put on the www.ctia.com.cn, we wish those websites we have mentioned at the beginning of this article can link to this announcement. Here we extend our gratitude for your kind cooperation.

Thanks for your time and your attenton to us!

Chinatungsten Online

16th,Nov. 2009

Xiamen, China