How to Tell If a Gold Bar is Real

Gold is a valuable commodity, and research pays off.

All that glitters is not gold, and inadequate preparation can lead to very costly errors. Economic uncertainty has caused many investors to purchase new assets in the form of gold bullion and gold bars, but this surge in popularity has led to a corresponding jump in fakes. Exercise extreme caution before investing in gold bars. Buyers must beware of any deals that sound too good to be true. Common sense and a little knowledge will make buying gold a more profitable venture.

Step 1

Familiarize yourself with the kinds of gold bars available for purchase. According to the Industry Catalogue of Gold Bars Worldwide, a gold bar is, "any gold item, regardless of shape, which is made by a bar manufacturer, records the name of the manufacturer, the precise weight and the precise purity, and is sold at a low premium above the gold price." There are dozens of gold bar categories, so if you see a seller advertising a hologram or chi bar, don't immediately assume that the bar is a fake.

Step 2

Develop realistic expectations of your gold bar budget. Use it to measure the accuracy of market prices. As of November 2010, gold was selling for slightly more than $1,300 per troy ounce. Gold bar prices typically include a small premium over the market cost of gold. Therefore, a 1-ounce gold bar may reasonably command a price of more than $1,400, even if the gold itself is only trading at $1,300. You will not find a legitimate gold bar for any price under the market value of gold.

Step 3

Pay attention to the product description if you are buying a gold bar online. Many mints produce replica or copy gold bars for tourists to purchase at the conclusion of a tour, so if you are looking at a Perth 1-ounce gold bar for $14.95, you can safely assume that you are looking at a replica. Gold is soft and malleable, so if the gold bar you are considering does not show any signs of wear and is resistant to damage, you are not looking at an authentic gold bar.

Step 4

Always look for the "London Good Delivery" seal of approval when purchasing commercial-sized bars of 400 ounces or more. Only 55 firms worldwide have garnered the honor to commercially produce gold bars, and the London Good Delivery List is extremely careful about the goods that it sanctions. Ask to see the dealer's certification, or check the London Good Delivery List for gold to find a licensed broker in your area.

Tip

When in doubt, take your gold bar to a jeweler or metal worker for authentication. They will quickly be able to tell you if your gold bar is the real deal.

references