With anything valuable, there will be some fraud or black market surrounding it, and gold is no exception. Of course, there are the usual cases of counterfeits, which we have covered in the past. In this post, we’ll go over some other types of fraud that gold dealers, and even miners, should be aware of.
For example, gold laundering is used to conceal the source that provided the gold. It may be used by small-scale unlicensed gold mines or by larger operations who want to look like they are complying with regulations. For example, MGS does not accept mined materials from Africa – so an unscrupulous seller might try to launder their gold to make it look like it came from somewhere else. Basically, the process works by taking the illegally obtained gold and treating it like scrap – melting it down and recasting it to make it look bullion from a legitimate source. Unlike counterfeit bullion, the gold is 100% real, but carries the risk of legal fallout if its true source is discovered.
Luckily, there are detection methods. Gold fingerprinting uses laser ablation inductively coupled plasma mass spectrometry (LA-ICP-MS) to give a gold sample a unique identity based on its trace impurities. Unless these miniscule impurities are painstakingly refined out of the laundered gold (gold launderers are unlikely to have the time, resources, and skills to accomplish this), the gold can be traced back to its true origin.
Another type of fraud is mostly exclusive to the mining industry: gold salting. This involves adding gold to an ore sample to make it look like its area of origin has richer deposits than it actually does – which deceives and defrauds the mining company’s investors. Luckily, this is also easy to detect. Gold ore usually has very little gold in it, so if it’s salted, it’ll produce suspiciously erratic assay results. It also runs into reproducibility problems when additional samples from the same site are tested.
