How You Can Protect Yourself From the Growing Scourge of Counterfeit Coins
Counterfeit coins were once the bane of shopkeepers and their customers all across the world. There’s no worse feeling than selling your goods and suddenly realizing that the coins you’re holding in your hands aren’t really the gold or silver you thought they were. Thanks to the decreased usage of coins in commerce in recent times, it’s been mainly coin collectors who have faced the problem of counterfeit coins. But gold and silver investors are at risk of buying counterfeits too. So how do you protect yourself?
The primary source of counterfeit coins today is China. With China’s manufacturing centers in full swing, you can find counterfeits of just about every coin that’s ever been produced, from crude copies that are obvious fakes to sophisticated replicas that can fool even the most experienced coin experts and coin graders. Some Chinese counterfeiters even use old coin presses that were discarded by the US Mint.
One of the clearest giveaways that a coin is fake is that it is underweight, particularly if it’s a gold coin. Gold’s density is double that of lead, making it very heavy to hold. Normally, just holding a gold coin in your hand is enough to feel whether it is made of gold, or whether it is made of some sort of pot metal.
But thanks to a quirk of nature, the density of gold and the density of tungsten are nearly identical. And while tungsten isn’t cheap, it’s far cheaper than gold. Tungsten is more difficult to coin than gold both because its melting point is over 4,000 degrees Fahrenheit higher than gold and because it is an incredibly hard metal that will wear out coin dies very quickly. Still, unscrupulous vendors in China sell gold-plated tungsten copies of popular coins and bars, and those copies make their way to the United States, very often imported by dishonest people who attempt to pass them off as genuine.
The good thing for investors is that the coins that are most popular for IRA investment, such as American Gold Eagles, Austrian Philharmonics, and the various coins produced by mints in Australia, the UK, and Canada, are not the most popular coins to be counterfeited.
With a melting temperature of over 6,000 degrees Fahrenheit, it takes a lot of energy to make counterfeit coins out of tungsten. Counterfeiters prefer to get the most bang for their buck, making copies of older historical gold or silver coins whose value is primarily due to their high collector value. For collectors of high value Morgan silver dollars or 19th century gold coins, they have to be very discerning lest they purchase a fake. In fact, some of the fakes made to fool collectors are actually made with the correct gold and silver content!
But while collectors are the primary target of counterfeiters, investors aren’t immune. You may be tempted to buy that American Gold Eagle you saw on eBay that was listed well under its spot price. But do you know where that coin came from? Do you trust that the coin is actually what is advertised, and not a well-made forgery?
Neither the US Mint nor the US Secret Service have done much in recent years to combat the flood of counterfeit coins coming from China. That’s why investors who want to invest in physical gold need to do their due diligence and invest with someone they can trust.
Goldco prides itself on the relationships it has developed with the custodians who safeguard their customers’ gold and silver, and with the mints across the world who produce the coins that their customers purchase to safeguard their retirement assets. They take every step they can to ensure that the coins their customers purchase are authentic coins minted in the UK, US, Canada, or elsewhere, and not in a Chinese counterfeiting facility. So if you’re looking to hold gold coins in your precious metals IRA, you can trust that Goldco will give you the real deal.