Testing Gold: Electronic, Acid or Touchstone?

Any time you’re serious about buying gold, even if it’s from a trusted friend or family member, it’s important to determine three things. First, is it real gold? Second, is it pure gold or gold-plated? Third, what Karat gold is it? Testing is important because it determines the value of the piece. People may misremember where they got the item, or it may have been a gift the recipient assumed was real gold but isn’t. There’s also a possibility the person doesn’t think it’s as high quality as it actually is. To be fair to both yourself and the seller, always test every gold piece before buying. Here are your options.

Electronic Gold Testing

Electronic Gold Test

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Testing gold electronically is the newest method for determining purity. You’ll need an electronic circuit, testing plate and a bottle of testing acid, which are available in all-inclusive kits. Put a small scratch in the item before testing. The reason for scratching is to determine if the piece is solid gold, not just gold-plated.

Put an entire bottle of testing acid on the plate. Dip the gold item into the solution without touching the test plate. The advantage of the electronic method is you only need a single bottle of acid to test for Karats 9k to 24k. The disadvantage is you have to use a new bottle for every item you test.

Acid Gold Testing

Gold Acid Test

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Acid testing is the most common method, but its name is misleading because all methods require acid. You’ll need a bottle of test acid for each Karat (9k, 10k, 12k, 14k, 18k, 22k and 24k), a color matching chart (which usually comes with your acid) and something to scratch the gold item with, such as a pocket knife or file.

Scratch the gold (to make sure you’re testing underneath any possible plating) and begin with the lowest Karat acid. Apply the acid and compare the color it turns to the colors on your chart until you spot a match. Normally, real gold stains brown and imitation pieces turn green or bubble. After testing, wash the acid off with water and use a pencil eraser to buff off the stain.

Touchstone Gold Testing

Touchstone Gold Test

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Touchstones are usually made of finely textured glass, fieldstone or slate. You’ll need gold testing acid and actual gold sample pieces of each Karat, to compare the test item to.

Rub the test item across the touchstone and do the same with one of the sample pieces to make side by side marks. Apply testing acid to each mark until you get a match. Touchstone testing is best reserved for cases where you’re already sure the item is gold, but aren’t sure of the exact Karat.

A Word About Magnet Testing

Magnet Gold Testing

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Many websites and amateur testers recommend testing gold pieces with a magnet before you buy. However, this is a bad business practice if you’re serious about investing in gold. Magnets are drawn to fake gold and not to real gold, so it’s fine to use a magnet before performing a touchstone test. But never depend on a magnet test alone to price gold. Because you can’t be sure of its purity, there’s no way to offer a fair price. Test Karats using electronic, acid or touchstone methods.

Scam Alert: Fake Gold Bars, Phony Investments, and Shrinking Portfolios–Oh My!

Scams are everywhere. From late-night commercials selling you products that don’t live up to the hype, telemarketers toting the next best thing and then disappearing, to criminals hawking fake jewelry and knock-offs, who can say what’s true and what’s a scam? The most recent wave of scams involve imitation gold bars. They look real and the promise of money is alluring, but buyer beware—this may not be a genuine purchase. Here is background information you need to make sure you aren’t a victim of such a scam.

How it Works

Gold Bars

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Counterfeit gold bars are being created. They look legit, even weighing the proper amount. They can pass through all the necessary tests, including X-ray and weight assessments. They are created from real gold bars—from the outside, they appear in perfect condition. But they are filled with tungsten—a compound that costs merely $1 an ounce and feels just like gold.

Even serial numbers and the paper from the original gold bar come with it, fooling even the most discerning eyes. They are polished and sealed to perfection. Such gold bars have appeared in America and the U.K., which means buyers need to take notice.

Look for These Warning Signs

Authentic Gold

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Buyers should heed this advice prior to making any gold bar purchases:

  • Companies that promise large returns on your gold bar investment are not to be trusted. No investments are guarantees.
  • If you deal with a high-pressure salesperson that wants cash immediately, say no. They may take your money and run.
  • Telemarketers from offshore companies are a red flag. It’s best to garner as much information about the company and contact the Better Business Bureau. If you are still unsure, it is always a sound idea to stick with companies that have already earned a good reputation.
  • You must ask about fees and commissions—know where your money is going. If you don’t, you may be charged an excessive amount of dollars off the original quote.

Look for an Alternative

Gold Alternative

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Rather than buy physical gold and risk purchasing a fake–exposing you to a loss of potentially thousands of dollars–you can invest in gold funds instead. Such funds include Market Vectors TR Gold Miners (NYSE Arca: GDX), RBS Gold Trendpilot ETN (NYSE Arca: TBAR) and PowerShares DB Gold Fund (NYSE Arca:DGL).

Buyers should always be armed with as much knowledge as possible when making major purchases. You are putting your own financial future at risk if you don’t know the warning signs. It is always good advice to follow your instincts when it comes to decisions like these—if you feel any doubt, it’s best not to invest. Following this mantra may save you from losing thousands of dollars, which would take years to re-coop.

What to Check Before Paying Cash for Gold

There are two good reasons for buying gold. One reason is to accumulate assets that retain (and gain) value no matter what happens to the global economy. The other reason is to turn a profit by buying gold at low prices and selling it for at or near market value. Some buyers do both. Whichever you choose to do, know what you’re buying before taking that plunge.

Know the Current Market Value of Gold

Gold Market Value

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Gold prices are constantly in flux. Prices today aren’t the same as last week or last month. If you’re serious about getting the best price for the gold you buy, check the current price before every transaction. There’s no need to fret about a few dollars change during the day, but you’ll need to be aware of the quarterly and monthly trends to get the best value in the gold you buy. The New York Stock Exchange (NYSE) reports the current price of gold throughout the trading day.

Determine the Exact Weight of the Gold

Weight of Gold

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It’s absolutely crucial that you keep accurate scales. Never assume that a coin, bullion or piece of jewelry weighs what the seller says or what is printed on it. Weigh every piece of gold every time you buy. Keep your scales calibrated properly. Having a backup set of scales isn’t a bad idea either.

You’ll need scales that can accurately measure extremely small weights, down to a fraction of an ounce. Note that gold is traded in Troy ounces, which are not the same thing as standard ounces. There are 12 Troy ounces in a pound, whereas there are 16 standard ounces in a pound.

Test the Purity of the Gold

Test Gold Purity

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Again, pay no attention to the markings. Test each piece of gold you buy with a gold test kit, also called an acid testing kit. These aren’t expensive, and can save you a lot of money because you won’t be buying 10 karat gold and paying for 24 karat gold. Test kits also keep you from mistakenly buying gold-plated items that can look and feel real, even to an experienced eye.

What Not to Consider Before Buying Gold

Gold Deal

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Frankly, a person may seem honest but isn’t. Con artists thrive on having good personalities to woo their victims and charm is no indication of honesty. Even if the person is completely honest they may be misinformed. Perhaps the jewelry was a gift and the giver led the person to believe it was real gold when it was fake. Maybe the person bought the piece at a second-hand store and the proprietor assured them it was gold yet it was just heavily plated. Whatever the case, a seemingly honest person is no indication that you’re getting what you pay for. Buyer beware.

Gold buying is lucrative when done properly, but can cost the unaware buyer greatly. Take some time to practice weighing, testing and pricing gold before you begin meeting customers and laying down cash. A little prep work ahead of time can save you hundreds of dollars in the long run.

The History of Gold: Ancient to Modern Times [IG]

Learn about the history of gold from the ancient days of golden masks and temples to the current practices of gold stents being used in heart surgeries. Gold has been popular around the globe for more than 4,000 years because of its pliable, attractive nature. While people once considered metals like silver and lead appealing, gold became the symbol of the height of fashion and wealth because it is rare and safe.

 

From the ancient royals to today’s rap stars with gold grills and giant chains, the value of gold has gone up considerably. Find out in this infographic how gold has become an appealing investment opportunity, and where today’s gold is being mined.

 

History of Gold