How can you spot fake silver and gold coins?

There are two reasons for buying silver and gold coins. One is for their value as collectibles. The other is for their value as precious metals. The former is very specialist. The latter, however, is often of great interest to regular investors. With that in mind, Joe Pannu, Managing Director of Wall Street Metals IRA, shares his quick guide on how you can spot fake silver and gold coins.

Try putting it against a magnet

Real silver and gold coins are resistant to magnets. If, therefore, a coin sticks to a magnet, it has a high percentage of ferromagnetic metals such as nickel (also iron, cobalt, and steel). It’s advisable to use a fairly strong magnet for this test. You need to be sure that the coin is non-reactive rather than that the magnet is too weak to cause the reaction.

Check against a reference

Note the dimensions, weight, imagery, and production date of the coin. Then cross-reference these with the details given by a reputable source. If you’re looking at physical coins (instead of online descriptions), then consider taking a measuring tape and scale with you. That way, you can verify the dimensions and weight for yourself instead of relying on the description.

Check the hallmarks

If a hallmark is easy to read, then you can just search for it on the internet. If it’s more difficult to read, try taking a photo of it. Then search for the image. This is not guaranteed to be successful but it’s definitely worth a try.

If you’re planning on buying coins regularly, it may be worth investing in a jeweler’s magnifying glass (or loupe). These are small, portable magnifying glasses designed for inspecting jewelry. You can also photograph through them.

If you don’t have a jeweler’s magnifying glass with you, you may be able to use your phone as a magnifier. Your camera app may have a zoom function. If it doesn’t, you could install an additional camera app that does. There are good ones available for free.

Look at the condition of the coin

It’s perfectly common for older coins to become somewhat worn through handling. You should, however, still be able to make out the quality of the production. In particular, you should still see the quality of the materials. It’s highly unusual for real silver coins to have either rough edges or surface irregularities.

It’s even more unusual for them to have discoloration. Precious metals are highly resistant to tarnishing. If, however, you spot a small area of discoloration, that could be due to somebody trying to test the coin for authenticity. This is particularly likely if it’s in an area that is usually hidden.

Do an acid test

Technically, you can test silver and gold/or coins with any acid. In practice, it’s probably advisable to use a proper testing kit. After all, if you’re prepared to spend money on silver and/or gold coins, then it makes sense to spend money to test them.

Proper testing kits are fairly accurate but not always exact. That’s why people in the precious metals trade are increasingly switching to X-ray fluorescence analysis. This is better known as XRF analysis. It is highly accurate, but the cost of the necessary equipment is likely to be too high for most investors.

A word of caution

Spotting fake silver and gold coins is very like spotting fake goods in general. A lot of the time, it’s fairly easy. This is because a lot of fakes are of a low standard. Some fakes, however, are of a very high standard. These are only likely to be picked up by an expert.

This means that the safest approach is just to buy from reputable dealers. For example, if you have a Precious Metals IRA, the custodian can buy from verified sources for you. What’s more, if you have any concerns about what you have received, they can have it checked by a specialist.