The issue of counterfeit gold coin minting has existed for years. Flooding into the marketplace, these coins pose a huge problem for the global economy. However, minting companies can counter this problem by investing in simple, yet advanced, anti-counterfeiting solutions.
Even as coinage has evolved throughout the history, counterfeiting still remains an issue. Coin forgers are skilled in creating similar replicas of collectible coins as well as circulating ones. The counterfeiting technology has advanced to the extent that the lookalike coins are difficult to identify by an average collector. With gold coins appreciating in value, the incentives for counterfeiters also increase, making it lucrative to create and sell fake coins.
Counterfeit coins are made from a variety of materials, such as copper, silver, or gold-plated tungsten, and are often manufactured in countries with lower labor costs and fewer regulations. The coins are then sold to unsuspecting buyers, either online or in person, who are led to believe they are purchasing genuine coins.
What Kinds of Gold Coins are Commonly Counterfeited?
St. Gaudens gold coins, Chinese gold pandas, South African gold Krugerrands, Mexican gold 50 pesos, and $20 Liberty Head gold coins have always been among the most commonly counterfeited gold coins. But of late, Canadian gold maple leaf coins have also joined the list, according to a 2018 survey conducted by the Anti-Counterfeiting Task Force.
The same survey reveals that the list of most frequently-encountered fake bullion is topped by gold American Eagle bullion coins. In fact, 41.2% of coin dealers in the United States met customers who were trying to sell them fake gold American Eagle bullions, the survey says.
These coins are often targeted due to their high value and popularity in the market. Forgers also target rare and antique gold coins that have a high numismatic value, such as the Saint-Gaudens Double Eagle.
Why is Counterfeit Gold Coin a Major Problem?
Counterfeiting gold coins has a huge economic impact (discussed later in the article) but improved technology has eased the way for the minting of more genuine-looking counterfeit gold coins. The problem of counterfeiting has elevated to such an extent, in fact, that people who are familiar with gold coins may not be able to identify a counterfeit one right away.
Taking advantage of this situation, criminals are trying to sell fake gold coins to pawn shops and coin dealers who might not know how to spot fakes.
There are also different types of fake coins that make it harder for consumers to identify, for example, fake coins with high gold content. Coins such as 20 Mark German Kaiserreich, gold Sovereigns, and Swiss “Vreneli” are commonly counterfeited by mixing gold with other metals to reduce the cost of production.
Plus, counterfeit coins present a significant safety risk to collectors and investors. Coins that are made with non-gold base metals handled improperly. The use of toxic materials in counterfeit coins has been a growing concern, as some coins have been found to contain lead, cadmium, and other harmful substances.
For example, there are newer versions of counterfeits that use Tungsten as the base metal. Tungsten has almost the same density as gold, making it easy to replicate as fake gold-plated Tungsten coins.
What Other Coins Are Counterfeited?
Common Fake Coins
The most commonly-counterfeited coin in the US, as per the Anti-Counterfeiting Task Force’s 2018 survey, is the Morgan silver dollar. Fake 1893-S Morgan dollars, worth hundreds of thousands of dollars, are also circulating in the market.
It’s followed by Trade dollars, Peace dollars, Lincoln cents, Early American copper half cents and large cents, and Seated Liberty dollars.
Extremely Rare Coins
Counterfeiters also counterfeit an extremely rare or collectible coin worth a lot of money. Examples include the 1943 Copper Cent and the 1927-D Double Eagle.
Territorial and colonial issues commonly struck as replicas or copies include Blake and Company Double Eagles and Continental Dollars.
How Can You Currently Check the Genuineness of Gold Coins?
There are several methods used by professionals for detecting counterfeit gold coins. These include using a microscope to examine the details of the coin, using spectroscopy to determine the purity of the metal, and testing the electrical conductivity of the coin, among others.
The microscopic examination of a coin involves looking for minting defects in the design, lettering, and overall appearance of the coin. This method requires a trained eye and a good-quality microscope to detect the differences between genuine and fake coins.
X-ray fluorescence spectrometer analyzes the composition of a gold coin in a non-destructive manner. While this method is accurate in analyzing the composition, it can’t detect fake coins that are made of gold but are tampered with to create rare coins of different dates.
Metals have different electrical conductivity, making the measurement of it another easy way to identify the genuineness of gold coins. With this method, coins can be checked without breaking the foil seal. However, it requires a specialized instrument and can have lower accuracy where a coin is made of pure gold but other specifications such as the date of the coin are modified.
Specific Gravity Balance
A specific gravity test compares the density of a given gold coin with the known density of that coin. This is a simple method to identify fake coins made with impurities like lead and zinc, but won’t be accurate for higher-quality counterfeits.
All these methods are time-consuming and require specialized equipment, which is not accessible to all collectors or investors. Even after performing several tests, the accuracy can be low for high-quality fake coins made out of gold but modified to increase the value.
The Economic Impact of the Counterfeit Gold Coin Problem
The counterfeiting of gold coins damages the reputation of the minting companies and the precious metals industry as a whole. Investors and collectors who unknowingly purchase fake coins lose substantial amounts of money, and the brands that mint the coins suffer reputational damage. If counterfeit coins circulate in the market undetected, it creates doubts about the authenticity of all other coins produced by that brand, leading to a loss of trust and a decline in sales.
It also distorts the market by creating an excess of supply, leading to a reduction in prices. That has a knock-on effect on the wider economy, as investors lose confidence in the market and prices decline.
Companies lose money for every fake coin sold by a forger instead of the original company. Plus, the cost of developing and implementing new security features can be significant, leading to higher prices for genuine coins.
Anti-Counterfeiting Solutions to Shield Against Counterfeit Gold Coin
To combat the problem of counterfeit coins, minting companies have introduced a variety of overt security features to their coins such as micro-engraved designs, laser-etched holograms, and tamper-proof packaging. However, counterfeiters have become adept at replicating these features, leading to a need for more sophisticated authentication methods.
This is where AlpVision’s patented anti-counterfeiting technology, , comes in.
AlpVision Fingerprint is a unique, covert anti-counterfeiting solution to detect genuine gold coins by comparing them to a previously-acquired digital reference image and thus verifying the surface structure of the coin. This technology leverages the existing microscopic surface irregularities of the metals, making the identification non-damaging to the object.
More specifically, it can discern the original mold cavity and detect the approximate coin minting date. Since this makes no changes in the surface of the item, you can safely integrate it into gold coins already available in the market, all while keeping the costs low.
A consumer can then use a smartphone application like VERISCAN to determine the authenticity of the coin in less than 3 seconds. VERISCAN is a free and simple iPhone app that uses advanced scanning technology to authenticate gold coins.
Because of the simplicity of the process, this is accessible by consumers and professionals alike, with no need for any specialized instruments. The method is also highly accurate, with a margin of error of only one in ten million. Consumers no longer have to rely on experts for verification, increasing consumer trust in brands using such a technology.
Brands also struggle with no control over genuine products once pushed into the market. However, AlpVision’s Brand Monitoring System also allows you to track the products in real-time to identify any suspicious usage patterns.
Counterfeit Protection with Covert Solutions for Gold Coins
Counterfeit gold coins pose a serious threat to both the integrity of the coin-collecting industry and to the individual collectors and investors who purchase them. The problem is complex and can only be tackled by a multi-faceted approach.
Minting companies need to take proactive steps to improve their anti-counterfeiting measures, while collectors and investors must remain vigilant and knowledgeable about the signs of fake coins. Brands also need to actively educate their consumers about the identification of real coins. In that case, the identification needs to be extremely simple like AlpVision’s Fingerprint, which only takes seconds to identify.
To understand how you can implement this technology, contact us today.