Buyer Beware: Fake Silver Eagles Surface Amid Rising Precious Metals Values
The Daily Sheeple
February 12th, 2013
Reader Views: 8,149
An unknown number of counterfeit 2011 silver American Eagles have been introduced to the marketplace. Many are believed to have originated from China and sold to unsuspecting buyers via online auction sites. But now the coins are popping up at local gold and silver shops around the country, suggesting that holders of these fake coins are likely selling them into the domestic US market.
(Above: Red arrows on the obverse of the counterfeit 2011 American Eagle silver bullion coin, far left, denote some diagnostics that differ from the genuine coin, far right. Compare the heads of Liberty on both pieces; the fake coin is second from the right and the genuine piece is at the far right.)
(Above:Â The lettering on the counterfeit 2011 American Eagle silver bullion coin, far left, isÂ thinner and not as defined as on the genuine coin, far right. The tail of the U in UNITEDÂ on the fake)
(File mark on edge of counterfeit 2011 American Eagle silver bullion coinÂ reveals a homogenous alloy, not a plated composition.)
Chances are that US sellers of the fake coins have no idea that they are counterfeits.
Even dealers who have been in the business for decades have commented that the counterfeits can easily pass rudimentary visual tests.
Andrew Greenham from Forest City Coins in London, Ontario, Canada, who spotted a counterfeit come across his desk recently had the counterfeit subjected to spectrographic analysis. The results were reported by Coin World:
While the composition of a genuine American Eagle silver bullion coin is supposed to be .999 fine silver, the spectrographic analysis of Greenhamâs counterfeit 2011 piece discovered a homogenous composition of the following:
50.4753 percent nickel
39.3614 percent copper
10.1163 percent zinc
0.0271 percent gold
Greenham said officials at the unidentified facility where the spectrographic analysis was conducted suggest that âthe gold is probably an anomaly, as it wouldnât make sense to put any of that in there.â
With the ever decreasing value of fiat currency, more and more people are turning to precious metals to preserve their wealth. Gold and silver will not only maintain their value, but actually increase, making precious metals one of the most popular investments on the market today.
But how does the amateur prevent getting ripped off?
JM Bullion (www.JMBullion.com), one of the nation’s largest online gold and silver retailers, says there are several steps investors can take to avoid getting scammed by counterfeit coins.
- Weight. The most important thing to do is weigh the coins using a fine jeweler’s scale. We weigh every piece we buy from the public, and this is the quickest and most definitive way to spot counterfeits. It is extremely hard to make a counterfeit coin appear correct dimensionally and also have the correct weight.
- Visual Inspection. As you gain experience in the industry, you start getting a feel for things that just don’t “look” right. If you are buying products you previously own, American Silver Eagles for instance, you can quickly compare your new purchases to your old ones to verify that the design and intricacies appear the same on both coins. Even small differences are certainly causes for concern.
- Know Your Seller. By far, the easiest way to avoid counterfeits is to buy from reputable dealers. The odds of purchasing counterfeit material from a major dealer are extremely low, and those odds increase as you buy from individuals or private sellers on eBay or Craigslist or such.
Knowledge of the investment you are purchasing is paramount, which means you need to know everything you can about the type of coin or bar you plan on buying, something that can be acquired from the official web site of the US Mint or from the producers web site.
If you are investing a large amount of money, learning some other testing methods could help prevent a whole lot of heartache and serious financial losses.
The first test that you can perform is the magnet test – gold and silver do not stick to magnets – if the coin or piece of jewelry you are testing does, you have a fake on your hands.
However, as more people become familiar with this simple test, professional counterfeiters have begun to avoid using magnetic metals in the production of their fakes. If you are investing any significant amount of money into precious metals, become familiar with these testing techniques:
- Ring TestÂ (video) â A silver coin or bar will have a distinct ring, as opposed to fakes which will have a thud when struck or dropped.
- WeightÂ (video) â Understand that a âTroy Ounceâ, which is how we generally weigh precious metals, is different from the popular âAvoirdupois Ounceâ used as a more traditional unit of measure in the United States. Just because a coin or bar says it weighs a certain amount doesnât make it so. If you have a gram-based scale, bring it with you to the coin shop or Craigslist exchange. If you donât have one, spend $30 and pick one up before you spend thousands on precious metals.
- Nitric Acid TestÂ (video) â You may not be able to test every coin or bar with nitric acid, as it requires a little bit of filing down to get under the âplateâ but if you are buying in bulk, the seller may allow you to test a random piece of your choosing after youâve performed a magnet, weight and ring test.
- Coin CaliperÂ â If a counterfeiter uses a metal other than silver, chances are that the coin dimensions will have to change â or the coin will weigh more or less than it is supposed to with the specific dimensions. Every minted coin has a specific diameter and thickness. A caliper, usually available for $15 â $50, will give you the ability to measure the specific inches/millimeters of a particular coin. Cross compare this information, along with the weight, to the mintâs coin specifications and if they match up, then the likelihood of a fake is extremely low â especially if it ârings true.â Â (Source)
Buyer beware. As prices of precious metals continue to rise, more counterfeit coins will find there way into the marketplace. If you’re an investor, become familiar with your preferred coin or bullion bar. Know its dimensions, weight and overall “feel” to help you prevent getting scammed.
Most importantly, stay away from sellers you don’t know and establish relationships with reputable dealers online or in your local area.
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