Monday, March 26, 2012

Detecting fake gold bars

Fake gold bars are in the news at the moment due to a discovery recently of a gold bar in the UK filled with tungsten so detecting fake gold bars is important to ensuring that you retain the value of your gold bars.

When you buy gold bars you expect them to be real gold bars, not fake. Fake gold bars are those which have had the gold drilled out of them and the gold replaced by tungsten. Tungsten is a similar weight to gold and so the difference is not easily detected at once. But if you weight the bar there can be enough of a difference to warrant further inspection.

A 1kg gold bar can be drilled and drained of most of its actual gold content and then replaced with tungsten. Such a bar is going to be two grams lighter than a normal gold bar.

Many of these 'gold' bars can be in existence undetected as it is rare that anyone actually tests every individual gold bar they have. In fact Sen. Ron Paul has questioned on more than one occasion if the gold bars in Fort Knox are 100 percent pure. Currently there has been no answer to this question.

If, as some analysts speculate, there are hundreds of these bars in circulation then the true supply of gold in the market place is going to be substantially less than the experts agree. This can affect the gold price as it increases the rarity of gold available.

It at least increases the costs involved in obtaining and checking gold for purity and that can only add to the over price of gold also.

So when you buy gold, make sure you BUY GOLD and not some tungsten fill gold bars.

You can check for tungsten and other minerals or metals in gold bars by melting them down and separating the various metals. Each metal melts at a different temperature, for example tungsten melts at a higher temperature than gold, so the different metals become apparent then. Of course this is an expensive and laborious job and really only should be attempted if one can afford the time and expense and has a number of bars which one feels may be faked.

Another way to detect fake gold bars is the weight them. In a 1kg gold bar the difference will be about 2 grams. Not a great deal but enough to warrant further investigation. Larger bars will have a larger difference in weight of course and smaller bars, a lesser difference in weight. You might consider that it is hardly worth while for the smaller bars due to the amount of work involved drilling and replacing etc. But keep in mind that smaller bars carry a very tiny fraction of weight difference and so extremely hard to detect and with today’s gold prices it becomes a viable proposition. But even this is not guaranteed as if someone takes the time and trouble to mix say iridium with the tungsten to match the weight of the missing gold, in itself a laborious process, then weighing the gold bar or bars may be insufficient as a detecting measure.

According to Hans Zoebelein, of, a precious metals trading company in Germany, a very effective way, for smaller bars, is to use eddy current meters.

"Fine gold and fine silver have pretty characteristic conductivities. Add some tiny amount of some other metal to gold or silver and your conductivity changes heavily. Same goes if you having a thin layer of gold or silver above another metal. A minor problem is the limited depth of measurement. You usually are getting a measurement depth of around 0.3mm, but if you are checking small gold bars up to 100 gram eddy current alone is good enough to validate that your bar is OK. The problem is the big bars. They could be filled with tungsten and that fake material would be sitting deep enough. It won't be detected by your eddy current meter if there is enough gold between the surface and the filling. The eddy current tester would tell you that the top most layer is fine gold. But it wouldn't find out about the stuffing.

Here the ultrasonic instrument is coming to your rescue. It shows you whether the big thick bar is homogenous. Or if it is a "gefillte fish" with tungsten buried below some millimeters of fine gold. Testing small bars, even if they are sealed in plastic foil (less than 0.5 mm thick) takes only a few seconds. Testing many kilograms of silver medals for fine silver takes you a few minutes only. Add 0.5% of another metal to fine silver and conductivity breaks down. Also distinguishing genuine coins from fake coins (even if metal composition is the same!) is much easing with an eddy current tester."

When you are buying gold bars then the first thing to do is make sure you buy from a reputable dealer. Do your due diligence on the gold dealer and ensure they are bona fide and have been trading for some time. Check they have a fix premises and not just a website and hotmail email.

Then ensure they carry a guarantee of authenticity for the gold bars INCLUDING a return of the bars if they are found to be fake gold bars. All bars should have a serial number on them which is listed on the invoice so they can be tracked and the dealer knows you are not buying a genuine bar and returning a fake.

If you are buying a large quantity it is possible to have the bars checked with ultrasound. The same device as used to check the condition of unborn babies in hospitals. This will detect any abnormalities such as you would find with a tungsten filled bar. The difference in density between gold and tungsten will show up with the ultrasound.

Apart from making sure one does not lose the value of one's gold, detecting fake gold bars is important as it helps to maintain the accuracy of the gold price when you buy gold.

Friday, March 23, 2012

Gold is Green

Gold is green it seems when it comes to solar cells. By sandwiching a layer of gold nanoparticles between two solar subcells that absorb light, up to twenty percent more light can be absorbed and that means more energy.

A UCLA Henry Samueli School of Engineering team have found they can utilise gold’s enhanced "plasmonic effect", or the ability of metal to absorb sunlight, by using gold nanoparticles to help create a strong electromagnetic current.

In their experiments, a layer of gold nanoparticles are sandwiched between two light-absorbing subcells in a tandem polymer organic solar cell. This creates the plasmonic effect which ultimately increases the energy created by the solar cells.
Professor Yang Yang says the result is a highly efficient organic solar cell using a relatively simple idea. "The plasmonic effect happening in the middle of the interconnecting layer can enhance both the top and bottom subcells simultaneously - a "sweet spot" - leading to an improvement in the power conversion efficiency of the tandem solar cell from 5.22 percent to 6.24 percent. The enhancement ratio is as high as 20 percent."

According to the University, this is the first time a plasmonic-enhanced organic solar cell, and also the first time metal nanostructures have been successfully incorporated into an organic photovoltaic device.

The organic photovoltiacs field is relatively new and still in its infancy compared to the well established conventional silicon-based solar panels and thin-film solar cells. But the UCLA team consider there is a bright future for organic photovoltaics which they say 'could provide opportunities for more highly-efficient, multi-stacked tandem solar cells.'

According to the UCLA Team, ‘Carbon-based organic photovoltaic cells, which use organic polymers or small molecules as semiconductors, are significantly thinner and cheaper than their inorganic silicon-based counterparts. Unfortunately, they are also much less efficient at converting sunlight into electricity. That could be on its way to changing, however, as an international team of researchers have reportedly boosted the efficiency of organic photovoltaic cells by 20 percent ... with some help from gold nanoparticles.'

And a research team from France and Denmark are also exploring using gold nanodots as a way of increasing energy output from organic solar cells. They are looking at adding a layer of gold half a nanometre thick, to the surface of indium-tin oxide-coated glass.

Assistant Professor of chemistry, Dr Ross Hatton, at the University of Warwick, a specialist in nano-structured electrodes for organic photovoltiacs recently stated, "The need to improve upon iridium-tin oxide as an electrode material is clear and it is remarkable that such a low coverage of gold is so effective in facilitating charge carrier extraction. The methods reported by Dr Cattin and co-workers for determining fractional surface coverage are key tools for probing this important class of electrode buffer layer."

Dr Richard Holliday, the director of Technology at the World Gold Council also commented recently, "Gold has a strong track record of use in the electronics industry, largely due to its high conductivity, chemical stability and compatibility with other elements. The combination of properties makes gold an idea candidate for conductive layers in photovoltaics. Through precise control of metal thickness, manufacturers and able to use gold cost-effectively."

When it comes to solar energy efficiency it seems that gold is indeed green.

Wednesday, March 14, 2012

China, the gold leader

Recent figures from China’s Ministry of Industry & Information Technology show that China is continuing to be the world’s leader in gold production. China’s gold output last year rose by 5.89 percent to a massive 360.95 tonnes and in January this year alone a rise of 3.69 percent from the same month in 2011 indicates a definite increase this year over last. This means that China has well overtaken India in the gold stakes and is continuing to speed ahead.

Of course this is no where near the hugh demand for gold in China. Consequently massive imports, according to some reports, rose to around 800 tonnes and it is not likely to stop there.

Other nations, however, are showing a decline in gold production as existing mines need to go deeper to extract gold and the safely and cost issues are beginning to have an adverse affect on gold production. South African has been experiencing a decline on gold production for a number of years. Australia also has noted a small drop in production from 266 to 264 a year later. The US, it is feared, is suffering the same fate but figures are not currently available to confirm this.

On balance then China and of course India are the big winners in the gold accumulation stakes.

Where does the money come from to buy all this gold? Well, China is using some of its massive 3 trillion US dollars to buy gold hand over fist and even encouraging its citizen to do the same. There are hundreds of 'illegal' mines and gold exchanges around China which the government is turning a 'blind' eye to. The official gold exchange is doing a roaring business. Call are out in Hong Kong to 'buy gold' in any quantity from buyers there. And Hong Kong is considered the main conduit importing gold into China.

Some analysts say the China is preparing to bolster the Yuan with a form of gold standard to protect it from instability when the dollar languishes for good. It wants to sell off all its US dollar before it is worth zilch and what better way than to buy gold with it.

Of course it is not buying too much at once. No need to cause a gold rush and boost up the price. China may be buying gold with depreciating dollars but that does not mean one should waste them. Nay, get as much gold as possible for them. That’s what makes China a gold leader.

However, it does mean that as soon as the major investors spot this the price of gold is going to rise so Now is a very good time to buy gold while it is still relatively cheap.

Monday, March 12, 2012

Gold Resource Corporation to issue Gold and Silver Dividends

In a first the Gold Resource Corporation (GRC) is to issue Gold and Silver Dividends to its shareholders. In a recent press release GRC announced the launch of a novel and innovating gold and silver dividend program for it's shareholders.

Gold Resource Corporation, a low-cost gold producer with operations in the southern state of Oaxaca, Mexico, has paid 20 consecutive monthly dividends totalling over $41 million returned to shareholders, since they declared commercial production.

The company dividend will continue to be in cash but a unique option for shareholders is the ability to convert their dividend into gold and silver. This will be done through an "individual bullion account," in which the shareholders cash dividends are converted into Gold Resource Corporation "Double Eagle" one ounce .999 fine gold and/or one ounce .999 fine silver rounds. Gold Bullion International (GBI) is the institution that will facilitate the cash dividend to physical gold and silver conversion. GRC will instruct GBI to draw gold and silver Resource Corporation Double Eagles from the Company's minted physical treasury and distribute precious metals as directed by Company shareholders.

"A convenient and simple way of delivering precious metal dividends to shareholders has been a long-term goal of the Company," stated Jason Reid, President of Gold Resource Corporation. "With innovative assistance from Gold Bullion International, management of Gold Resource Corporation is pleased and excited to announce the launch of the Company's gold and silver dividend program, a dividend program unlike any other known program offered of its kind."

According to a recent GRC Press Release, "The program powered by Gold Bullion International's operational and technology platform will allow shareholders to fully manage their cash dividend conversions into gold, silver, or a desired percentage of each metal. After conversion into a physical metal dividend, shareholders may elect to store their physical within GBI's fully insured and audited storage facilities (for a nominal fee), take direct delivery of their precious metals, or direct the shipping of the metals to a vault of their choice."

Where a shareholders dividend is less than one ounce of silver or gold, the shareholders cash dividends can be accrued until they have a sufficient balance for the conversion into one ounce denominations of gold or silver.

Mr. Reid stated, "Gold Resource Corporation provides premier precious metal exposure with an aggressive production growth profile of low cost ounces, growing cash and physical precious metal treasury, high-grade exploration prospects, distribution of a monthly dividend and in April 2012 another major milestone for the Company is being set as we prepare to launch the option for shareholders to receive gold and silver dividends."

Mr. Reid continued, "Gold Bullion International and Gold Resource Corporation are on the verge of a groundbreaking and monumental shift in how mining Companies may distribute dividends to their shareholders in gold and silver."

About GRC: Gold Resource Corporation is a mining company focused on production and pursuing development of gold and silver projects that feature low operating costs and produce high returns on capital. The Company has 100% interest in six potential high-grade gold and silver properties in Mexico's southern state of Oaxaca. The Company has 52,902,620 shares outstanding, no warrants and no debt.

About Gold Bullion International: Gold Bullion International (GBI) is a leading institutional precious metal provider to Individual Investors and the wealth management industry.

For Shareholders of Gold Resource Corporation, the issuing of Gold and Silver Dividends is indeed a new way to 'buy gold and silver'.

Sunday, March 11, 2012

Switzerland wants its gold back

It seems Switzerland wants its gold back.

Recently four members of the Swiss parliament presented a "Gold Initiative" to secure the Swiss National Bank's gold reserves. The goal of the initiative and committee will be to collect 100,000 signatures among the Swiss population. This will then enable a referendum by the Swizz to vote on the initiative, which includes the following stipulations:

1. The gold of the Swiss National Bank must be stored physically in Switzerland.
2. The Swiss National Bank does not have the right to sell its gold reserves.
3 The Swiss National Bank must hold at least twenty percent (20%) of its total assets in gold.

Up until ten years ago, the Swiss National Bank gold reserves were historically regarded as the "property of the Swiss people" and could not be sold. However during the last decade the Swiss National Bank changed this policy and sold over 50 percent of its gold reserves in order to buy currency.

The Swiss Initiative regard this as a bad move, contributing to the loss of assets of the Swiss people. They consider that both the central bank and the politicians do not have the right to sell "the people's property".

"If the initiative is accepted, and this looks quite possible, this would back up a portion of the Swiss Franc with physical gold and would also force the Swiss National Bank to reveal the location where the gold is stored." According to

Switzerland is not alone in having concerns about their gold.

The Germans are also increasingly concerned their gold, over 3,400 tons of it, most of which us is reputedly stored in the Federal Reserve Bank of New York, 33 liberty, in a extremely secure vault stored 80 feet below street level, may be in jeopardy and will soon be asking pointy questions about just how much gold is really there.

Venezuela has successfully pulled its gold to its own shores and others are due to follow. Yes indeed Switzerland wants its gold back and they are not the only ones.

Wednesday, March 07, 2012

Pricing something in gold

Some people have asked how you price something in gold.

It might seem a silly question as one can price something in gold simply by dividing the price of the article or service in question by the gold price on that day.

But importantly the issue is more about the changing values of gold and currency when it comes to buying products and services. The following example demonstrates the value of buying gold instead of property or shares.

If you bought a house in June 2003 for 100,000 dollars. That house might very likely sell today for about 200,000 dollars. Twice what you paid for it. On the face of it that sounds like a good investment but when you translate that into gold ounces it paints a completely different picture.

In June 2003 gold was around 355 dollars an ounce. So if one used gold to buy the house it would have cost 281.69 ounces. If one had simply kept the gold and not used it to buy a house that 2871.69 ounces would now be worth 478,873 dollars. Take 200,000 from 478.873 dollars leave a very nice gain if you kept the gold but a net loss of 278,873 dollars if you bought the house.

So, in this example, putting money into property, at this time instead of gold is not always what it is cracked up to me.

The same applies to buying stocks or shares. The question to ask is, how much will the shares go up as compared to the gold price?

You can do this with any product or investment. There are heaps of historical charts on this website where one can find out what the price of gold was any year and compare that with the price now. Looking at the cost of goods and services then and now gives you an appreciation of the difference in price, not just due to the rise in the goldprice but also due to the depreciating of the dollar.

Taking this into account the term buy gold takes on a whole new meaning.

Indeed, one can build a chart using excel or a similar program to chart the price of various goods and services in gold price terms. As well as applying stock and shares it can even be applied to exchange traded funds.

It all goes to show that when it comes to investment gold can hold its own against almost any other form of investment despite there being no dividends.