Sadly, dealing in secondary market bullion bars bears the risk of encountering counterfeits. Although it is highly irregular to come across fakes, it is absolutely possible and remains a valid concern for investors.
Experienced gold bar bugs may choose to rely on their expertise to identify potentially suspect bars; but more commonly, investors prefer to pay the premium for gold bars associated with acquiring them from a trusted source rather than investing in secondary market bullion bars that have fallen outside a secure chain of custody.
The sure way to verify the gold content of a bullion bar is to extract a sample of metal and assay it. Of course, that process destroys the original condition of the bar and its associated premium value, if any. There are anti-counterfeiting security features applied to gold bars during the manufacturing process, which offer robust measures to reduce the risks of counterfeit bars finding their way into circulation.
The four basic types of gold bar security technologies are:
Digital Recording and Recognition
To verify authenticity, this scanning technology identifies and compares the surface profile of gold bars with a digital record that was captured at the production stage. Each manufactured gold bar possesses microscopic surface profiles that are distinctive, like a fingerprint. The comparison of the bar to the manufacturing refinery’s records would suggest a potential fake. A popular trade brand of this methodology is Pamp’s VERISCAN.
Security Ink Mark
Also used in paper document security, special high-security ink is applied directly to the surface of a gold bullion bar. Checking the authenticity involves a visual examination, a pass through a sophisticated light system, and verification of an embedded QR code. The process is fast – capable of verifying more than 100 kilo gold bars in less than 60 seconds. A popular trade brand of this methodology is Metalor’s BullionProtect security feature.
Kinegram Imagery
Another effective technology introduced decades ago is the Kinegram, a diffractive optically variable image device, somewhat similar to a security hologram, that is embossed into the surface of the gold bullion. These security devices are the product of OVD Kinegram AG, Switzerland. A popular refinery utilizing this methodology is Argor-Heraeus’s, whose product is known as a “Kinebar.”
Micro Engraved Security Element
Micro engraving is a process of adding a distinct security mark into the gold bar surface using modern laser technology, whereby these applied devices can only be visible under magnification. Modern laser technology is now easily implemented and commercially viable for rapid production at economic costs. The Royal Canadian Mint uses this popular security enhancement.
Another security concern for some investors is where and how to protect their gold investment after the purchase is complete. While some investors choose to store gold bullion bars at home in a gun or wall safe, another option is to utilize a well-renowned precious metals depository like Brink’s. The costs of depository storage are quite minimal considering the many benefits, including not having to insure your gold at your residence or place of business.
Monex also offers a solution. At Monex, investors acquire one 32.15 oz pure gold kilo or smaller gold bars in units of 10 but only pay the associated fabrication premiums if and when home delivery is made. If the gold is sold back to Monex, there would be no loss of premium. Your overall investment transaction has the advantage of cost savings, which benefits your return on investment. Why pay for a premium when you could be getting more gold? Call your personal Monex account representative to discover the ins and outs of gold bullion bar investing.
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