How To Spot Fake Gold Coin and Avoid Fraud

Planning of buying a gold coin? Know how can you spot a fake gold coin and avoid being a victim of fraud. Read to know more!

27 Dec,2022 10:33 IST 5 Views
How To Spot Fake Gold Coin and Avoid Fraud

In India, gold coins have traditionally been used as a safe-haven investment to stave off the volatility associated with risky assets and also as a safeguard against inflation. There are also occasions, such as Dhanteras and Akshaya Tritiya, when buying gold jewellery or a gold coin is considered auspicious.

The most common unit of measuring gold is its weight in gram and purity in karats. 'Caratage' is the measurement of purity of gold alloyed with other metals. A 24 karat is pure gold with no other metal. Lower caratages contain less gold; for instance, an 18-karat gold would contain 75% gold and 25% other metals, often copper or silver.

One must be careful before buying gold coins because, like all other industries, counterfeit products exist in this segment as well. However, there are several ways an individual can protect himself from buying fake gold.

> Buy From A Known Source:

The best way to ensure the authenticity is by buying gold coins from authorised dealers. If one is unsure about the gold coin recently bought or owned for some time, he should take it to a competent authority for evaluation.

> Stamp Test:

An authentic gold coin will be stamped with the karat weight or purity of the coin and the manufacturer’s name. The buyer can look for the Bureau of Indian Standard's hallmark. The stamp indicates its purity in karats or fineness. For example, BIS Hallmark on 24KT 999 gold coins signifies 100% purity.

> Magnet Test:

Gold is not magnetic, so a magnet can be a useful tool to determine whether a buyer has actually bought a coin or a cheap base metal. This may not be an all-encompassing test as the coin may consist of some other non-magnetic metal, but it certainly helps narrow down the field.

> Scratch Test:

For this test, a non-glazed ceramic plate is needed, and the goal is to drag the coin across the plate, scratching the surface. If the scratch is black or grey, it's not real gold. If the scratch is gold, then it is genuine. But this technique has its limitations as it may cause damage to the coin.

> Colour:

All that glitter would not be gold. Imitation metals often discolour when subject to corrosion. Gold does not corrode nearly as fast when exposed to moisture. Specks of black or green might indicate a false metal beneath the golden surface. A low-quality imitation usually displays these spots when its disguise is incomplete.

> Acid Test:

This test involves use of nitric acid and can be dangerous for the person conducting the test and even for the gold coin, if not handled carefully. So, this test is best advised to be left for experts.

> Density Test:

Gold is a dense metal and the purer it is, the denser it is. Therefore, a density test through a density test kit or water displacement method can be used to determine whether the gold coin is real or counterfeit.

> Weight and Size:

This test works well for gold coins as gold is denser than most metals. To test the purity of a gold coin, a buyer needs to compare it with an authentic one. He can also use callipers and a jeweller scale to check the size. A fake gold coin is frequently lighter than pure gold and is easily identifiable.

> Avoid “Too Good To Be True” Deals:

An offer appearing too good to be true, most certainly is. Such an offer must be seen with suspicion. Dealers typically charge a premium over the spot prices to make up for the cost of minting and other expenses.

Conclusion

People buy gold coins for three major reasons: personal savings, family presents, and business gifts. These coins might also be useful in times of financial emergency.

However, one must be cautious before buying a gold coin. You should watch out for counterfeit products and be aware of the various ways that can help you spot fake gold coins and protect from fraud.

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