Status: Not Logged In; Sign In

World News
See other World News Articles

Title: The Drilled Gold Bars Filled With Tungsten
Source: [None]
URL Source: ... with-tungsten/?sh=4b9b02ac4e13
Published: Mar 26, 2012
Author: Tim Worstal
Post Date: 2022-05-17 20:05:57 by BTP Holdings
Keywords: None
Views: 65
Comments: 3

The Drilled Gold Bars Filled With Tungsten

by Tim Worstal

Mar 26, 2012,11:57am EDT

This article is more than 10 years old.

I have to admit that I really do like this story. Over the weekend there's been some rather breathless speculation about how a gold bar has been found, one that has been drilled out and filled with tungsten. Given that I'm actually in the metals trade, albeit not bullion or tungsten (I have handled both but they're not my specialty) I thought I'd have a closer look.

The first mainstream report that I saw was by Felix Salmon at Reuters. And there's two parts to that story.

Firstly, I wouldn't be surprised if someone has attempted to do the substitution. It's been known for a long time that the densities of tungsten and gold are close enough that in theory, drilling out a hallmarked gold bar and replacing the interior with tungsten could fool all but the most sophisticated of tests.

You can see the purported photos of the bar that has been found here. Following the story around the claim is made by ABC Bullion that a Swiss refiner (and producer of good delivery bars to the London gold market) MKS had sent out the warning email last week. Which, at least as of lunchtime today was something of a surprise to MKS as when I spoke to them, they had no idea about it all. There were quite a lot of people like me asking about it, but they had no idea whether the story was true, whether someone in their company had sent it, no real idea of what was going on at all. They were quite mystified in fact.

But as I've said, in theory this sort of thing is possible even if it would be very difficult to do in practice. Further, I'm not really sure that the economics of it quite work out either. Sure, tungsten is vastly cheaper than gold but this would be very skilled work with a low success rate and the gross profits are a few thousand $ per 1 kg bar so treated. It's most certainly not a 5 minute job either. Nor mechanisable. Just not sure that it would be worth it.

Where the story goes off into fantasy though is here (and Felix is correct in the questions he asks to try and work out prevalence):

If there are 1.3 million salted 400 oz bars in existence, and each one is 75% tungsten, then that makes 390 million ounces of gold which in truth isn’t there. At $1,660 per ounce, that’s over $600 billion which people think they own but don’t. To put that number in context, it’s roughly half the total quantity of subprime mortgages which had been issued at the height of the housing bubble.

The answer to this comes from a commenter there:

The amount of turnover in the market is much higher than you think. In the case of the professional market which deals in 400oz bars, yes many of these sit in central bank vaults but many others are held by private investors and these are traded. There has been no occurrences in my 18 years in the industry, and I haven’t heard of others, of fake 400oz gold bars. Any bar coming out of a LBMA accredited refinery can be trusted because the refinery cannot control or know where the bar will end up and during its life there is a good chance a bar will eventually be melted for use by a jeweller or other refiner and as such there is a high probability of being caught out.

In the retail market I’d guess that turnover is a lot higher, particularly as retail investors do tend to exhibit herding behaviour, which means when there is selling it usually overwhelms retail buyers at that point in time. The end result is that in a net selling situation dealers do not sit on gold due to the high holding costs vs low profit margins and uncertainty as to when buying demand will return, so they liquidate that net selling excess back to refiners, where it is melted. Thus there is a fair bit of turnover and again, a good chance of fakes being detected.

I would take that even further. Even the ingots in central banks, or in gold vaults, sometimes get sent off to be refined. For the very same reason those vaults are regularly vacuumed for the trace amounts of gold that have rubbed/been chipped off the ingots. It's absolutely true that gold doesn't oxidise or decompose, but as bars are moved around then they inevitably get bumped and after enough of that they are likely to get sent of for refining so as to maintain their good delivery characteristics. And no, a tungsten filled bar would not be refined without someone noticing.

If I were to assign percentages here, I'd say that someone trying to drill out a bar and fill it with tungsten would be up near 100%. I'm sure the idea has occurred to lots of people independently. As to this being a common occurrence among good delivery bars I'd put it down somewhere near zero. There's just too much turnover of bars through the refineries for this to be possible.

Update: I should have added that the first people to raise concerns about the veracity of this story were the guys and gals at the Screwtape Files. As to who was first to find out about MKS, well, by the time I phoned them at lunchtime (European time) Monday they were already obviously bored with answering the questions so I know I wasn't first to do so even if I did do so.

Poster Comment:

As always, let the buyer beware.

Post Comment   Private Reply   Ignore Thread  

TopPage UpFull ThreadPage DownBottom/Latest

#1. To: BTP Holdings, 4um (#0) (Edited)

I doubt there's too many tungsten bars in the retail market, let alone any bars. 400 oz troy is a chunk, ~$750,000. There may be some fake oz Chinese rounds going around, I wouldn't recommend eBay as your metals dealer, try OnlyGold or TexMetals.

Fake plated bars in the possession of .govs? Sure bet. Probably not even tungsten, lead.

“The most terrifying force of death comes from the hands of Men who wanted to be left Alone.
TRUE TERROR will arrive at these people’s door, and they will cry, scream, and beg for mercy…
but it will fall upon the deaf ears of the Men who just wanted to be left alone.”

Esso  posted on  2022-05-17   21:06:46 ET  Reply   Trace   Private Reply  

#2. To: Esso (#1)

I have explained just how easy it would be to fake gold bars with Tungsten.

If someone wanted me to recast gold for a profit, here is how it can be done. Here would be the way to take a 400 oz gold bar, and turn it into 40 gold bars.

You buy one of these large ingots. You buy blocks of tungsten to size that is similar in configuration to your gold bar.

Take the gold bar, get some polymer or oil based clay that has no sulfur in it. Cover the serial number. Pull a silicone mold off of the gold bar. That silicone mold will be used for lost wax castings. You make 40 wax positives, and then cover them in either poly stone or plaster. You then heat up the plaster mold so that the wax runs out leaving the empty cavity.

You take each of your relief molds and pour one to two ounces of liquid gold covering the face of the bar where the serial number is supposed to go. You let it cool down, and then lay in your block of tungsten. You back fill the remainder of the gold so that it covers completely the tungsten core. You do this 40 times, and you then have 40 bars of gold that look, and feel just like the real thing.

THEN, you take the bars, polish them with a jeweler’s wheel to remove the scuffs, and any imperfection, and then stamp the serial number you want in the serial number box. If the original has cast in numbers, a metal die should be made instead.

That being said you can also get graphite mold boxes for ingots for precious metals on Amazon and or Ebay.

If I were a dishonest person I could have been making all manner of phony shit. Instead, I chose a life of law abiding moral superiority.

"Call Me Ishmael" -Ishmael, A character from the book "Moby Dick" 1851. "Call Me Fishmeal" -Osama Bin Laden, A character created by the CIA, and the world's Hide And Seek Champion 2001-2011. -Tommythemadartist

TommyTheMadArtist  posted on  2022-05-18   0:37:01 ET  Reply   Trace   Private Reply  

#3. To: BTP Holdings (#0)

A few years back, perhaps a decade, the USA attempted to cheat China by selling them gold bars filled with tungsten but China drilled them so the cheating USA had to make good.

DWornock  posted on  2022-05-18   10:15:23 ET  Reply   Trace   Private Reply  

TopPage UpFull ThreadPage DownBottom/Latest