Largest Private Refinery Discovers Gold-Plated Tungsten Bar - FTA Files Forums for all FTA Satellite Receivers

**Putski** · #1 (**permalink**) 03-06-2010, 11:25 AM

Largest Private Refinery Discovers Gold-Plated Tungsten Bar
By Patrick A. Heller

Recently, the German television station ProSieben ran a news story covering W.
C. Heraeus in Hanau, Germany, the world’s largest privately owned refinery. In
the story, Wilfried Hörner, the head of the gold foundry, shows a 500 gram bar
(16.0755 troy ounces) received from an unidentified bank. The bar had the right
physical dimensions to be an authentic gold bar, but one of the Heraeus
employees suspected something funny. After the bar was cut in half, you can see
that the inside is tungsten, with only a coating of gold on the outside.
You can watch this news story on You Tube, where it was posted February 28, at

YouTube - Tungstengold Tungsten Gold Wolframgold...

.
Last fall, Rob Kirby of Kirby Analytics in Toronto reported that China’s central
bank had discovered some 400-ounce gold-plated tungsten bars among those it had
recently received from bonded warehouses. It was later learned that at least
four counterfeit bars were found and that all had come from sources in the
United States. As suspicions grow about counterfeit bars among those held in
bonded warehouses for delivery against either COMEX or London Bullion Market
Association contracts or shares of exchange traded funds, investors could panic.
So, you can understand that there has been almost a total blackout on news
coverage on this story.
Tungsten is the only lower value metal that has a specific density close enough
to gold to fabricate passable counterfeit pieces of the same size and weight as
genuine coins and ingots. Over the years, there have been a few isolated
reports of smaller coins and bars found to have been drilled to remove some of
the gold which was replaced with tungsten. However, it is far more profitable
to fabricate larger original bars of tungsten that are then gold-plated.
Thus far, the commodity exchanges have disclaimed of any responsibility for the
purity of the gold bars they are delivering against contracts. As stories of
gold-plated tungsten bars in bonded warehouses continue to appear, I expect the
commodity exchanges are going to be forced to modify their business practices to
provide a guaranty of purity for any bars they deliver.
The process of non-destructive testing of bars to check for counterfeits
involves very expensive equipment and is time consuming. It is beyond the means
of almost all investors and coin dealers. For maximize safety, I recommend
purchasing only smaller size coins and ingots, say two ounces of gold content or
less, and only deal with a company that has a lengthy track record and in-house
staff expertise (unlike the bank that took in this counterfeit 500 gram bar).
If you have purchased coins and ingots from unknown sources, you may want to have
them checked out by an experienced independent third party.
In contrast, the last things I would want to invest in are large gold bars
stored in bonded warehouses in unallocated storage. If it turns out that the
warehouse holding your bars has too many counterfeit bars in their inventory, it
could go bankrupt. That would leave holders of unallocated inventory as
unsecured creditors of the bankrupt company, and not as owners of gold.

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