By Stephanie Yang
With this year’s surge in gold prices, many coin dealers are seeing a jump in forgeries; technology is making them harder to detect and easier to peddle
David Myers, a pharmacist in New York, wanted to increase his gold holdings, but he had a concern. How could he know if the gold coins he examined in a shop were real?
“I knew there were a fair amount of fakes out there,“ Mr. Myers said. ”There were a lot of good deals that I passed up on because I didn’t want to take the chance.”
Counterfeit gold is nearly as old as the precious metal itself. But dealers worry that this year’s powerful spike in gold prices is attracting new crowds looking to profit by peddling fake gold.
At the same time, making and selling counterfeit gold coins and bars has never been easier, industry executives say. The mix of metals has improved the look and feel of fake gold, while online marketplaces such as eBay and Alibaba have made it easier to sell these products world-wide.
Rod Gillis, education director at the American Numismatic Association, said that even experienced precious-metals dealers may have a hard time distinguishing fakes. The market has also discovered a sharp rise in cases of counterfeiters faking the seal and packaging of a coin to make it appear as if it was authenticated by a legitimate coin grader, a practice known as slabbing.
“It runs the whole gamut,” Mr. Gillis said. “It can be scary out there.”
Gold prices have surged 26% this year, fueled by concerns over global growth, low and negative interest rates, and fallout from Britain’s vote to leave the European Union.
Gold-coin sales for the second quarter were up 72% from the same period a year earlier, according to GFMS, a unit of Thomson Reuters.
Data that tracks counterfeit gold in circulation is scarce. No central organization is responsible for it, and investors can be reluctant to report fakes. But individual dealers say they have encountered rising numbers in recent years.
Josh Phair, president of Arizona’s Scottsdale Mint, said the number of reports that the company received about counterfeits has more than doubled in the past five years, with the largest increase over the past year, about 15% to 20%.