Fake Gold Bar in Jewish Diamond/Gold District in New York City
The diamond district in New York City is run by a code of ethics like few other private markets on earth. Your word really is your bond. So, when a 10-ounce bar of tungsten is passed off as gold, this is news — if not in the mainstream media, then at least in the hard-money media. This is big news.
The victim is an expert. The bar was stamped with what looked like a legitimate ID. But he drilled it anyway. It was a counterfeit.
He thinks that this is a professional job by some sort of criminal syndicate. It was very well done. This means that the counterfeits have invaded highly sophisticated markets.
Note: the victim contacted the Secret Service. He took the loss. He did not patch this up and re-sell it. His word is his bond.
This news has of course slowed trade in gold bars in the district.
I favor gold coins over promises to store gold bars, at least for purchases of your first $10,000. The likelihood so far of a counterfeit is lower. The risk of detection makes it less profitable per trade to fake coins over 10-ounce bars. This does not mean that gold coins cannot be faked. But there is more profit in faking gold bars.
Buy coins from a dealer who has been around for a decade or longer.
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Published on September 20, 2012. The original is here.
Soon thereafter, ten more fake bars were discovered.