Salted Gold or a Fishy Tale..? (UPDATED + Graphics) (AGAIN)

A long-standing allegation that one sees all over the gold- and silverogosphere is that most of the gold in Fort Knox is 'salted'. In other words, it's been fiddled about with so as to have a tungsten core.

Tungsten is a good metal to pick, as it is not ferromagnetic (so won't be picked up by electromagnetic detection techniques), does not significantly alter the weight of the gold bar, and - most importantly - is much cheaper than gold (around $400 per metric ton, rather than $1660 per ounce.)

Stories have abounded of these salted bars turning up in Hong Kong, and making their way into western central bank depositories, ETFs, and just about everywhere else. A lack of evidence has done little to hamper the progress of this on-line meme. Surely, if this practice was so prevalent, then someone, somewhere, must have a photograph of a salted bar?

Well, the goldogosphere has been abuzz since this long-searched-for evidence finally appeared to turn up a few days ago. On Thursday, the ABC Bullion website put out some photographs which seem to show a cut-in-half 1-kg gold bar that had  been salted with five tungsten rods. The story was picked up by the popular Silver Doctors blog, and run without edit or critical examination. So what are we to make of this? Is this the smoking gun goldbugs have been waiting for?

It appears not. Below left are the two halves of the supposedly cleaved bar, and below right (for comparative purposes) is an identical bar from the same series:

As can be clearly seen, a section is 'missing' from the 'salted' bar, left. This missing section is shown on our comparative bar, between the two red lines. The only logical explanation would be if the bar had been horizontally cut in half twice, with the missing section not appearing in the photograph. This section amounts to around 7% (I estimate it to be 6.8%) of the bar, or a hefty $3,600 dollars worth. It seems a bit careless to have just thrown it away - salted or not... But in any case, it makes no sense to imagine that the bar would have been cut in half twice, or at least not twice near the middle.

Further, if one looks at the pictures on the websites (it's easier to see there than here), then it appears that in one of the photographs there are five tungsten rods, equally separated, whereas in another photograph only the right three are clearly visible: the left two seem to be either 'blurred out' or just not there. Both of these observations might cause a sceptical reader to lean towards a 'photoshop' interpretation rather than a 'salted gold' one. But here at Screwtape we're regularly praised around the goldogosphere for our marked lack of scepticism, so in order to keep up this hard-won reputation, let's have a look at the story itself.

The source for the story, according to Silver Doctors, is the ABC Bullion Blog, which is the legitimate blog of the ABC Bullion Company. Now this blog seems to have two sites: the first is on the company's main website (here) and the second is on a Google Blogspot site. The articles are the same rather poor set of clipped videos and bullion pump propaganda that one finds everywhere on the net.

[UPDATE: Thanks to Prize Fighter and Bullion Baron in the comments for pointing out an error I made in the original post. I said that there were no posts on the ABC Bullion website older than 22 March. This was true (at the time of posting) for the blog on the company's main website - this carries only the most recent articles. However, the Google Blogspot version does indeed carry older articles, including the one about the salted gold bar, accessible by clicking 'older posts'. I am therefore happy to withdraw this part of my article, and apologise for any confusion caused to the reader by my confusion over ABC's parallel websites.]

In addition, the story itself does not make sense. Apparently a British scrap dealer came across this bar, and then he sent the photographic evidence to his 'client', ABC Bullion. What is a scrap metal dealer doing buying 1 kg gold bars? Did someone chuck it out with their rusty garden tools and their 30-year old Morris Minor? And, more to the point, what is ABC Bullion - a respectable Australian bullion dealer - doing sourcing its gold bars from British scrap metal dealers?

The photos and the story, are all so fishy that I'm afraid I have to award this 'story' a big "F". It's not the gold that has a rotten core, it's this shameless bit of nonsense.

[Addendum by Warren] The great thing about joint blog ownership is being able to view and edit other posts - I wanted to add a little bit, especially since there's a fair spectrum of debate. I think the topic is important - after all it cuts to the core (sic) of a simple premise we have about investing in precious metals.
First, it's worth investigating Perth Mint's official comment about Tungsten bars in the industry in general their reminder is that bar melting is a regular feature at the mint, and it's because of that they can say that Tungsten is generally not a large or widespread problem. Another example is that serial numbers on bars make things generally more traceable - perhaps they will catch up with the guy who sold this bar. Quintus offers up the suggestion below that not only the images are real, but also that the police are doing some questioning.

Second, overall I'm not satisfied. Originally it was me who suggested to Jeanne that the images were possibly faked and yes, I'm prone to calling conspiracy where there is not necessarily one. Our point is that something's not entirely right and no one has questioned the authenticity of the story (except us, as far as I know). The photos by themselves are not a 'proof'. We should perhaps have done more research before publishing but here are some thoughts of mine:

1. The resolution of the image is too small. The best original images I could find were 500 x 677 pixels, which most likely have been sized up from 640 x 480 pixels wide, or even 320 x 240 pixels (proportions kept). I think the images are from a mobile device or some camera with a primitive CCD devide (particularly since the amount of JPEG compression is <b>high</b>). Some EXIF information in the photo would have helped with authenticity (even though it's easily faked with an editor) but the info gets stripped if the image is resized. The age of the original image can't be easily verified.updated 1st April (no, not a joke) - Found the original photo size - 1200 x 1600 pixels. There is a bit more detail in these ones, and the only EXIF information suggests that the images were uploaded to Picasa Web Albums at some point. This resolution does point to a more modern origin. Google appears to have done the resizing aspect.

2. Some irregularities exist with the images. This is kind of weird to be calling out because soon I hope to have some high-res bar photos of my own. But in my view the rods in this section of the photograph doesn't match what I would expect to see (colours enhanced), given that in theory this one shows all of the top half of the cut. The resolution of the image is probably to blame here, but my point is that the tungsten bit is not consistent.

3. Many comments about the cut itself. True, we don't know what it was cut with. A 1 kilo bar is actually kind of small (about 110mm high x 54mm wide for Metalor). I'll admit I've never cut one of these in half before but I'm guessing a heavy pair of scissors would easily have sliced through it, giving the curved cut on the top half and a relatively straight cut on the bottom. I still maintain that a section is missing although that can easily be explained by a second cut. I decided to experiment myself and cut open the most accessible gold I had. The coin was thin and was no match for the large IKEA scissors. I was moderately surprised to find a brittle metal core on the inside ...

This is a FAKE image by me, to give an example of what is possible. Bear in mind that I'm not that good at Photoshop and that this was put together inside of an hour. Please also note that I generally only buy bullion coins because they are difficult to fake. As others have pointed out, tunsten is brittle and would not survive a stamping process.

[ Just kidding. OKAY so now I'm being a dick. The takeaway is that in this age of photoshop, it pays to keep an open (and questioning) mind. What really matters the most is the timing of the stories that we hear and the origins of the promotion around it --Warren :) ]

[And another update from Jeanne d'Arc.]

Great addition, Warren - many thanks.

Well, this story seems to get bigger and bigger. Not only did Felix Salmon pick it up, but now Forbes has got involved too. You will recall that in our comments section ABC Bullion revealed that their source for this story was not in fact a London scrap metal dealer (as implied throughout the web), but rather the Swiss bullion dealer and refiner, MKS.

In his article (a great read, by the way), Tim Worstall of Forbes managed to get a reply out of MKS quicker than I could (not surprisingly), and found out some brand new information, which is pretty fascinating to read:

" 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."
Well, that is curious. As I noted in the comments section, below (prior to this new information):

"In particular, it's interesting that the source is MKS, who in turn have sourced this story from someone else (as yet unknown). The provenance for this story gets more and more Byzantine the more we learn about it."
"We've learned today - thanks to this post, I might add - that the supposed source (ABC Bullion) is not the source, but rather it is MKS. Further, we have to assume that MKS has its own source too. At each stage, the provenance - and thus the reliability - of the tale gets murkier."

And now we have even more 'murk' to add to the pot, thanks to Worstall's revelation. Originally the implication was that ABC's direct source was  the unnamed scrap metal dealer in the UK. This was then corrected (and was probably simply ambiguously written in the original articles - I'm not calling foul on that - but it still adds to the 'murk') to 'MKS' being ABC's source, and MKS in turn had been tipped off by the buyer of the bar. Now MKS are saying they know nothing about it, and are bemused by the story. Perhaps an individual in MKS did send it without their employer knowing about it. But then what was their source, if not an official one obtained through the company?

I expect this will run and run. As I said in the comments, it is of course possible that this will turn out to be a real tungsten-filled bar - I cannot possibly 'know' one way or the other (although Warren's hilarious picture shows just how easy it is to fake these things). But the important point - and the one I was (perhaps clumsily) trying to make in my original article was that the provenance of this story is just as opaque and unconvincing as any other of your standard internet stories/memes, just like the thousands one finds on Snopes. It's turning into no more than a 'he said, she said', 'a guy in a bar told me...', or a 'hey, read this, it's an AMAZING and TRUE STORY. This REALLY happened to a friend of mine'.

Occasionally some of these stories are true. But if this were one of them then, given the publicity, I wonder why the original dealer hasn't yet come forward to offer more evidence, be interviewed, or offer an opinion. And why does no-one seem to know who the source is? Not ABC, not MKS, and certainly not ZeroHedge.

Which is perhaps why ABC Bullion themselves have now pulled their own story, in an intriguing new development.

[UPDATE 28-March: The post mentioned here is now visible again, somewhere around the time we enquired as to why it went missing. The update has clarified ABC's sourcing. We have asked ABC for a further comment about the story.]

Finally, if any budding artists out there would like to have a go at creating their own photo-shopped 'salted' gold coins and bars (to rival Warren's great effort) then please send them to me! I'll publish a selection of the best in due course, and maybe even pick a winner ;-)


Kid Dynamite said...

Jeanne - you missed what I thought was the best part of the story:

if it's true, it's not bullish for gold - it's AWFUL for gold!! It's not a reason for the Goldbugs to celebrate - although they are, of course, bizarrely - it's a reason for them to panic!

the entire point of the bull thesis for physical gold is that you hold it your hands, you don't have counterparty risk, you don't have to worry about getting MF Global'ed, etc... but guess what - if the gold you're purchasing is liable to be stuffed with tungsten (or something else) - you DO have to worry about all of that! (side note: this might result in an increase in the % premium for smaller size products, but that premium would be over a lower base price: if there were widespread fraud and fear of counterfeit bars - that is)

now, goldbugs might reply that they can easily detect deviations, etc etc... maybe they can - but normal people can't, and you need average people to buy gold to keep the bull thesis going.

fraudulent product is BEARISH for the underlying - not bullish - regardless of if that underlying is paper stock certificates, ownership in companies, or bars of gold....

Anonymous said...

@KD - Hah! You know, I actually wrote a paragraph along those lines - basically questioning why a bullion dealer would want to add to the rumour that gold bars may not be all they seem. It would be like Coca Cola spreading a rumour that Pepsi Cola may give you herpes because of its cola content.

In the end I deleted it, because it just seemed so illogical that I couldn't think of a good answer to my own question.

But you're right. I was slipping into the trap of thinking that these memes should have any kind of logic about them. The celebrations of physical-gold proponents regarding this story are bizarre to say the least.

SilverIsKing said...

I wholeheartedly disagree with your assertion that it would be bearish for actual gold.

While there might be some trepidation on the part of buyers, thus weakening demand and hence price, this would be an extremely temporary phenomena as trusted sources would emerge and the knowledge of there being less actual gold than currently perceived would hasten demand from these trusted sources.

Price would then skyrocket but only for gold that is trusted.

When we talk about the price of gold, aren't we talking about the price if gold? Not alloyed gold?

Kid Dynamite said...


there are two effects, right?
1) marginal supply decrease (less real gold)
2) marginal demand increase (less people want gold because they don't want to get ripped off)

In my opinion, it's nearly impossible to come up with a realistic balance of those two which benefits gold. A miniscule supply decrease can cause a huge demand decrease. And a large supply decrease (ie: what if most of the world's gold was fake?) would destroy the case to be made for gold as some sort of monetary backing of the future - it would render it impossible.

i intentionally ignored your "trusted sources would emerge" comment because it's highly ironic - goldbugs already don't trust "trusted sources" (see: GLD)...

Prize Fighter said...

I don't see a missing section in the cut bar. It may appear missing if you're looking for a clean cut but it wasn't cut or sawed, it was sheared with snips. That is obvious.

Gold being the soft metal it is, using shears to cut it in half would deform and stretch the material into rounded camber edges. So some of your "missing" material has actually been stretched down into the cut. It seems as obvious to me as your assertion is to you.

Anonymous said...

@Prize Fighter,

Sheared with snips - fine. But that wouldn't 'deform' the material to such an extent that 7% of the bar disappears. Not a chance.

Regardless, tungsten, being the hard metal it is, cannot be deformed and stretched into rounded camber edges in such a manner.

So what you're saying is that the only way of producing such an effect is if there were no tungsten present in the bar.

Thank you for your comment in support of my article - it's much appreciated.

Louis Cypher said...

Warren, got that bar in your database?

It's neither bullish nor bearish as we are talking about 1 lousy bar with a dubious history. Dubious for all the reasons pointed out by Jeanne. Now if Fort Knox was hit with a dirty bomb or was found to have pallets of tungsten then we might be in for some interesting times.

If the London scrap dealer received this from some "cash for gold" doofus out in the boonies the story has some possibility of truth I suppose. Out in the sticks that may be your only option for cashing your gold in.

Also because they hire pimply teenagers to test the gold you could get away with this scam.
For example if you bring a gold coin to one of those idiots most will tell you it's fake because they don't know how to test for 24K.

If you wanted to insert Tungsten rods into a gold bar you would cut with a saw on one end so as to do minimal damage. Shearing would distort the shape but would be quicker. If I was to do it I would cut the bar on one end. Drill out the holes and super heat the tungsten and push the rods into the holes and then seal it back up. Pretty easy with a big enough chunk of gold.

Looking at the pic it does appear to have a missing piece.

Anonymous said...

"if it's true, it's not bullish for gold - it's AWFUL for gold!!"
Craziest most asinine comment ever. They Chinese counterfeit EVERYTHING.. from golf clubs to cars, bags, purses the list is endless. People counterfeit CASH, did any of these items crash and become "AWFUL"? NO.. people learn to examine what they are BUYING, LIKE ALWAYS!Its neither bullish or time for a celebration. Stuff like this has been going on for YEARS.

Kid Dynamite said...

@TheBigSetup -

if you don't understand the difference between golf clubs (which have a real use), bags & purses (which also have a real use) and gold (whose main use is the hope that other people will want it because its security and wholesomeness), well then, I won't be able to help you.

It doesn't surprise me in the least that Goldbugs wouldn't understand how bad a rash of counterfeit gold would be for their own beloved religion.

Prize Fighter said...

I'm not trying to assert anything one way or another. I have no interest in proving or disproving anything. Just merely judging by the pictures we've been given and based on those, it looks legit to me. We can get down to the minutia of photographic details but the bottom line is we don't have the bar to do first-hand analysis so the debate ends at each of our opinions. I'm fine with that because I can't see how you could assert 7% is missing based on a photo which said the bar was "cropped" not cut.

As for questioning the value of gold if salted bars are proved true...of course it makes real gold worth more. This isn't a Beanie Baby or something people will just choose not to buy. The only thing lessening here is the amount of real gold previously thought to exist.

For gold to lose value based on this, you are assuming demand will fall when actually supply has fallen. Diminishing value only makes sense if you assume demand will fall faster than a salted supply. I see it only increasing demand for the real deal.

What would be the value of the dollar if some turned up salted? Would the dollar collapse or would people take precautions to ensure they are real? (Such as the counterfeiting pens many stores use to check the validity of $100 bills.) Fortunately for gold, it cannot be reproduced unlike dollars. Both can be faked but it does nothing to either intrinsic value. Only thing which changes are precautions.

I'm just not sure what some of you are getting at here. I don't see why some are trying to spin this. It is what it is. Know your source because it's obvious to me that people will do bad things to get gold.

Anonymous said...

@Prize Fighter: OK, let's agree to disagree on the missing piece. What about the fact that the bullion company's blog was established on the very day that this story was produced? And that they've tried to make it look like a 'real' blog by posting a load of crap for three days?

And the fact that it was set up so that only Silver Doctor would receive the traffic?

And the ridiculous story about the (anonymous) British scrap metal dealer who apparently has an Australian bullion vendor as a client?

Are you honestly saying that nothing about this story sounds remotely fishy at all, even if we didn't have any pictures of the obviously photo-shopped bar itself?

Kid Dynamite said...

@PrizeFighter: "Diminishing value only makes sense if you assume demand will fall faster than a salted supply."

absolutely - and there is positively no doubt to me that this is the reality, as I already mentioned in a comment above. Gold's value comes from one thing: CONFIDENCE / belief that others will want to pay you for it in the future. It's really important to understand that.

Anything that potentially hurts confidence in the "value" of gold is a very bad thing for gold.

I think that what goldbugs don't understand is that in order for the price of gold to continue to rise, this "confidence" has to spread to other people - and it's wicked hard for it to spread if the layperson is afraid of being ripped off. (You may feel good about your ability to detect fakes, but i can assure you that the general population does not.)

Counterfeit dollars are a terrible example because they function completely differently - largely in that we usually don't hoard physical dollars: yes: if there was a glut of counterfeit dollars, such that we began to fear that if we received one, there was a decent likelihood it was fake and that we'd be out whatever value it was supposed to have, it would crush the dollar. But more importantly, we don't really care because we don't hoard dollars in physical form - we just pass them along.

IMO, it's impossible to argue that if the NY Times published a front page article about fake Gold Eagles on Ebay (just made that up - not saying it's happening) that it would be bullish for Gold Eagles because it meant there were actually fewer "real" ones, and thus that they had higher value. The result would, of course, be that people wouldn't want to buy Gold Eagles anymore. The current story is one variation of that one - that's all I'm saying.

Since I've already said pretty much everything that I think I can say on this subject, I'm going to (try to) bow out, rather than continue to repeat myself.

Prize Fighter said...

I'm not up to speed on the difference between "real" blogs and fake ones. I checked out this ABC Bullion Blog which you said "was established on the very day that this story was produced."

I scrolled to the bottom of that blog, clicked "Older Posts" a few times and found many pages and posts back to at least March 10th. Well before your accused date of startup. I don't have the time or inclination to continue clicking to see when it really started but your assumption sans "critical examination", to use your own words, that it was a blog created to only promote this story has been proven false.

I don't want to stop a good counter-intel meme but here's the blog. Click away.

Prize Fighter said...

KD, this is bad for ebay and unknown sources but not bad for gold. This is like the difference between a trader and investor mentality. What may hold true for days or weeks will not for months or years. We both have our opinions and everything after that is slanted from that position.

I'm done as well. Good luck all.

Bullion Baron said...

- You can get direct access to the article, hit the main page and then scroll through older posts. It would have been first page when posted.

- It looks like the blogspot is embedded into their main site as a feed hence the two sites.

- Google '' and you can see posts back to 2010.

- I agree with Prize Fighter that it looks like no piece of the bar is missing and it's just caved inwards as cut.

- The reason only 3 bars are shown in the top piece is that the Gold has stretched down to cover in the cutting process.

- A scrap dealer would buy whatever Gold comes across his desk.

All in all probably this is the worst Screwtape Files posts I've seen yet. Poorly investigated.

Anonymous said...

Sorry - I was in bed (time zones)

@Bullion Baron/@Prize Fighter

Yes, you're correct about the blog carrying older articles. More precisely, the blog on the company's website does not seem to carry older articles, but the blog on the Google Blogspot does. So I'm withdrawing this part of the article and I have updated the post accordingly.

Thanks for pointing out this mistake, which I'm happy to hold my hands up to.

I stand by the thrust of the article, however: this all seems very fishy to me.

Warren James said...

Wanted to add a comment:

The story itself can be found in multiple places - I counted about five different locations before I found what I wanted which was a larger version of the images. Its easy to understand the reasons why the story would be copied from place to place. I'm surprised that most pundits seem to have not questioned the authenticity of the images - that's what we do here, question reasons and motives. I'm suspicious of a story like this, there's something that doesn't sit right.

The resolution on the images makes forensics difficult - there's no EXIF information (data about the camera model, etc) and a lot of detail is lost because of the high level of JPEG compression. From my closeups and colour enhancements in photoshop, it does appear the five rods are present, but what's clear to me is that at least some of the material has been trimmed with a second clip - the cut on the bottom section is incredibly clean - a result I suppose of the shears that might have been used. It's not out of the question for more than one cut to have been made. Also absent is a photo of where the rods may have been inserted, since in theory there would be marks where the drilling occurred and then was patched up, and would ideally be the most useful part of a warning about fake bars. I'll try get some photoshop visuals/analysis if I get time this week.

note - This bar is NOT found in any of my ETF data since most of the popular gold ETF's stock 400oz bars.

pmbug said...

I'm wondering how someone managed to drill holes for the tungsten rods that are so close to the flat surfaces of the bar without breaking said surfaces around the areas of the bar which are stamped. From the images provided, it appears that there is very little gold separating the supposed tungsten rods from the flat surfaces.

Anonymous said...


look, it was a 1kg bar. That's more than $50000. Everyone who buys these, has at least a couple of them. So if you put in more than $100k into gold, then you can easily afford the equipment to check them or pay someone to do that for you.

It would be different if they faked some smaller coins in large numbers.

Finally, Kid, you don't need to have all the little people buy gold. If the non-US central banks decide to hike to gold price to $30000 per ounce, they'll just do that, and the little people will either love it or hate it, but they won't make a difference.


Unknown said...

Hi Jeanne,

Thanks for your discussion of my post.

The email I put up on my blog was from (PAMP refinery owners) and was sent to their clients (ABC Bullion being their distributor in Australia/NZ) as a warning to be careful in ensuring proper weights, etc. I have since made that point clearer in the post. ABC Bullion does not buy scrap gold from the UK. Actually we were not informed of the name of the dealer in question. As to the authenticity of the pics I cannot comment. They were sent to us in good faith and I published them in the form they were sent to us. Although I have no reason to question them. In the email it states the bar was "cropped" to open it, so I assume the gold on top and the bottom of the cut would have been dragged towards the middle of the bar, which would account for the "missing" bit.

Sorry for the confusion re the two copies of the ABC Bullion Blog. I started the blog on blogger in June 2010 and when we revamped the company website in late 2010 we took the decision just to RSS the blog entries to the company website, keeping only the most recent posts on the company site.

Background to ABC Bullion. We are one of Australia's largest bullion dealers, in business since 1972. We retail and wholesale our brand, PAMP and Perth Mint bullion bars and coins.

In regards to this specific post I posted it on our blog as a warning to our clients on 22 March. A day or so later I mentioned it to the Doc, and that he could offer it up as a general warning to his readers if he wished. It seems from there it got picked up by Zero Hedge and others.

Keep up the good work.


Greg Hudson
ABC Bullion
Sydney, Australia.

Anonymous said...

Finally, the original tungsten story is garbage. Even if someone would have filled Fort Knox (the author of that story did not know that half of the deep storage gold is at West Point, by the way) with gold plated tungsten, they would have been foolish to ship either LGD or retail size bars elsewhere where they will eventually spotted. Imagine a manufacturer of jewellery buys one of these, or one of the mints does.

On the other hand, that there is some fraud involving the more expensive retail products, does not really come as a surprise. I think there was another story about a (smaller?) bar at Hareus a couple of years ago. That story came from the refiner and was not fake.


Edward London said...

Warren, two other observations, as I also looked for original pics to look at EXIF data and couldn't find any decent pics. so if someone digs to find these original pics.

To me, it doesn't even look like the same desk. one appears to be more of a white oak teak veneer and the other more laminate looking w/out various real wood striations.

the hands appear to be different, though not conclusive, as both the hands and desk could be a lighting effect. conveniently, the photographer didn't put both halves of the bar in the same pic.

But something i saw in the comments section at SD was also that the website which is claimed to be the origin of the story posted that this originated in Germany, not the UK, which contradicts its official early report.

and if basics like that can be screwed up, it tells me that little depth was found before running w/this story.

I'm also of the camp that this is, IF TRUE, horrible for gold in the short/med term. likely bullish for gold longer term, as it will flush out some weak holdings and some weak hands, while preventing retail investors from coming in. But it will also cause ppl to be more discerning in what they buy and make sure it's real first. this will in effect decrease supply and those who thought they had 1%, 3%, 5%, 10%, etc. are likely to go diversify again if possible (hence bullish longer-term).

Edward London said...

finally, one point i forgot to make that's supportive of the initial story is that it's possible that the 7% of the bar is actually the part that's folded down where the "cut" was made, as alluded above.

this would make sense w/the pic as the lower half actually has a small (3%?) slightly shaded area where it appears the light is reflecting differently than the rest of the bar. this would mean the bottom of the "gold" and the very top most of the 999 are down there, just very hard to see.

one last point to clarify, by "if true" i mean a considerable portion of tungsten filled bars out there, which I doubt there are, i.e. this is a very insiginificant portion of the gold above-ground gold stocks.

Quintus said...

I have been on the phone to my (Very reputable) bullion dealer in London this morning. She is aware of this story and confirms that it is genuine and that the police are currently investigating the individual who sold the bar to the dealer who found the tungsten.

I should imagine that London Bullion dealers are very well networked and know what's going on in their business. If she says it's a real story, that's good enough for me.

Anonymous said...

@Tears of the Moon

Sincerely, many thanks for stopping by here, Greg, to cast some more light on this story - it's much appreciated.

In particular, it's interesting that the source is MKS, who in turn have sourced this story from someone else (as yet unknown). The provenance for this story gets more and more Byzantine the more we learn about it ;-)

Thanks also for describing your dual-blog set-up, which makes me feel like less of a twit now for my earlier mistake ;-)

Please do pass by again if you hear anything more about this story and its origins. Or you can email me here if you want to add anything further in private.

@Edward London: your comment about Germany (rather than the UK) being the origin of the story is intriguing. If true (if), then this would be a typical characteristic of on-line memes and stories - multiple origins, all of them hazy.

Finally, for those who this story has angered in some way, please let me add this. I'd genuinely like to learn more about this story. I have no vested interest in it being true or fake.

I'm not saying it's impossible, or even that it's definitely fake. I'm just saying that the version as presented and its provenance as presented have very fishy elements. It doesn't pass the 'sniff test' on many levels.

We've learned today - thanks to this post, I might add - that the supposed source (ABC Bullion) is not the source, but rather it is MKS. Further, we have to assume that MKS has its own source too. At each stage, the provenance - and thus the reliability - of the tale gets murkier.

It's therefore entirely reasonable to ask questions and engage in discussion, which is what this post was designed to achieve.

Readers don't come to Screwtape to be told what they want to hear. They come to be challenged in their views, and be allowed to make up their own minds, rather than being shepherded into group think. Long may that last.


JWMJR said...

IF this bar was "salted" with tungsten rods they were most likely inert gas welding electrodes which are available at any welding supply store. If they were it would preclude cutting the bar with a pair of heavy sissors, an industrial plate shear perhaps but not any pair of hand sissors. Tungsten is just too damn hard. Even an industrial shear blade would show signs of damage from the point loading at the impact points. There would also be scaring of the face of the bar from the hold down clamps on the shear. (hundreds of lbs per sq. in.) If and only if this is real it may have been placed in a press break that would have snapped the tungsten rods and would explain the rounding on one side of the cut. If there were a picture of the bottom side of the bar there would also be loading marks from the female side of the press die.

derek said...

@KidDynamite re: gold as religion

Au is the remnant of exploded, very large stars. What's even more important about it is the series of cyclical expansions and contractions of a supernova it takes to finally cycle up to where enough protons can be joined to form the Au molecule (see Chaisson Cosmic Evolution for a wonderful description). Each molecule represents staggering amounts of stored energy and is primarily why it serves so well as a store of wealth: something so difficult to manufacture is quite durable. In a world where all things pass, it does not. Religion (HT CG Jung) is for those with no experience and hence need belief. Gold has always been wealth and will be wealth when this time is a memory.

Anonymous said...

@JWMJR - excellent contribution - many thanks. We're currently trying to get some expert views on the viability of 'rodding' (for want of a better expression) a 1 kg bar and then cutting/shearing/whatever-ing it in order to produce an effect like that seen in the photos. Obviously we'll report back if/when we learn more.

Also, there's an extremely valuable comment over on the Kitco forums, from a member called Rockhounder, which I'll reproduce in full here (Bron, thanks for the tip off about this comment):

"Also did you notice how on that picture of the "fake" bar, that the "tungsten" inserts pushed up the surface of the bar along it's length, so that the upper and lower surface had a slightly wavy crenellation? That in itself would have been a dead giveaway to whomever picked up the whole bar, not to mention the plugged drill holes would have been impossible to fill and blend without melting that end of the bar, which in itself would have been a dead giveaway.

My opinion:

The biggest giveaway to me is the way the "tungsten" broke. Tungsten is unbelievably hard. Those numerous bars inside the gold casing would have immediately killed any shear that tried to cut it, except perhaps for a super sized industrial machine already set up with hardened blades for cutting tungsten. ALso, tungsten is a shiny, silver colored metal, and you would see that on the cut edges. Instead you see what looks like CLASSIC carbon rod end breaks. Of course carbon is super light, so the gold bar would have weighed half what is should have. I now am of the opinion to call pure BS on this forwarded story.

Also, the lack of follow up stories or news on this smells like internet scam to me, someone trying to create a little excitement in their lives by making a poor attempt at a "fake" bar. Curious that the Australian website that 'broke" this story attributes it to an unnamed UK scrap metal dealer, in an "unlisted" city because as the original story states "they didn't want to name the city as that might reveal who the scrap metal dealer was"... what a load of bunkum...... They said that that scrap metal dealer "gave the Australians the heads up warning"...... but somehow this same scrap metals dealer didn't go to the local police???????? wherethat story would be immediately publicized, to hopefully find other people who have also been scammed, so the police can do a better job of trying to catch the perps who did this???? The scrap metals dealer got scammed out of $25k and hes' going to Protect the scammer by not doing everything in his power to find the perps?????

Now this story just stinks of pure BS.

@Rockhounder - please pass by here to add more/join the discussion. It'd be great to hear more from you on this. Or send me an email if you prefer.

Smiddywesson said...

I can't agree with KidD's belief that this story turning out to be true would have any affect upon the price of gold. There are plenty of stories about Russian gold coins with rust, and phoney silver dollars. They haven't affected the price in the past, and this wouldn't affect the price in the future.

KD's coverage of the TVIX premium to NAV and investor's almost complete disinterest in their peril says it all. If retail wants gold they will buy even if some bars are discovered to have a chewy center like a Tootsie Pop.

Smiddywesson said...

I don't have the pictures, but there's a story on the web somebody cut TVIX in half and found a mini black hole.

Smiddywesson said...

I'm going to have to side with Prizefighter and say there's not enough in our field of view to definitively resolve the missing material question. However, I'm not convinced anything is missing. It's an inescapable fact that the surface area of the bar has to stretch as you force the sides of the bar together and snip them. This bar appears to have been snipped, and it's irrelevant whether the tungsten stretches like a snicker's bar or shatters, because the sides of the bar were stretched until they touched when the bar was snipped in two pieces.

I think we would find our "missing material" if we had a photo of left piece from a higher angle which allowed us to view the shear point. We are looking from a low angle, and doing the equivalent of saying the ship disappeared just because it sailed over the horizon.

mr pinnion said...


Looks to me that the bar has been cut on an industrial guillotine.The top edge is a givaway.I would maybe expect to see more of a wrag(sharp edge) on the underside of the cut, but ,never having cut gold before ,i couldnt say for sure.

I use 3 mm tungsten rods for TIG(tungsten inert gas) welding and i can, and often do snap them in half in my hands.Its not difficult as the metal is so brittle.
A Metalor 1 kilo bar is 52 mm wide and 9 mm thick.There looks to be about 2 mm at most of gold on top and below the rods, judging from the cross section in the photo, so the rods will be about 5 or 6 mm thick at most.
The guillotines used in most engineering shops would cut them without a problem.Though it might mark the blades as Rockhounder mentioned.

The wavey look on the under edge of the cut was probably made during the cut.The guillotine blade will have had to apply a certain amount of pressure before the tungsten rods snapped and this would have pushed them down into the soft 2 mm of gold underneath, causing the ripple effect.

The missing section of gold you spotted would never have been caused by one cut.Very strange.If you was going to make a second cut the obvious place would be further down ,to see how long the rods were. Hope this helps.


Warren James said...

I've been spending more time than is healthy looking at these images, but I'm still at it, checking my assumptions and others observations. While it's true that tungsten has a silvery colour, there seems to be a big blue object in the background of the photo which is adding some 'blue hue' to the picture. Alternatively, the bluish colour may be from the discolouration due to heat generated by the snapping/breaking of the rods. As mr pinnion (Ozzy) says above, tungsten welding electrodes can be easily broken using pliers but it still would have needed a fair force on a hefty blade to get through five of them. From my research, tungsten is most often manufactured using a 'powdered sintered' process which means it's originally in powder form link, which may explain the 'shattered' effect. But once again it gets weird because different materials/products will have different densities involved and the allowed variance as described by the story is only two grams (I haven't been able to find the density of welding electrodes and I don't have any of my own to test).

@Smiddywesson, I've been all over these images and even with a generous draw-down allowance there still seems to be some material missing. And the simplest explanation is from mr pinnion (again) that a second cut may have been made. On the image of the bottom half, I'm surprised not to see any bits of rod poking out (and there's no trace of colour in that area either) given the irregularity of the top half cut.

Hopefully someone closer to the story source is following it up, thanks to everyone who has commented here.

Smiddywesson said...

I would imagine if the material IS missing, it is because they snipped off a piece to obtain a length of rod sufficient to test. This doesn't make me more suspicious, but I agree the story sounds fishy.

mr pinnion said...

Wow, you ve got me at it now.

I m now of the opinion that either its two cuts or the halfs are from different bars.

The bottom half on the bar on the pic on Silver Doctors site clearly show a square 90 degree cut across the 999.9 area.
Now look at the top half at the 'Gold' lettering.
That dont look like a square cut to me.


Anonymous said...

@Ozzy: I want to kiss you and have your babies. Keep going...

Robert LeRoy Parker said...

That blue-ish hue is no doubt from Ashley Shaeffer's plums

Warren James said...

@RLP, classic.

For anyone interested in more forensics, I should add that it's likely that a fourth photo of the bar exists - somewhere. The sequence of the images is:


If the story is legitimate then the assumed missing photo ('Bar1_0.jpg') might be of the original certificate (which, if you were a metals dealer writing to the refiner about one of their bars, would be natural to include). The speculation about a fourth photograph does not add much value to the discussion, but someone somewhere has a copy and it might lend more clues to the legitimacy (or otherwise) of the story.

You might add to that - there is a second zero in the file naming, which could mean that other variations exist (e.g. Bar4_1.jpg), you might take photos like that if you were say ... claiming insurance.

But then, a file versioning technique is also common when working with ... photoshop files :)

And yes, I've become a bit obsessed with this. I find it all particularly interesting as it touches many different levels of intrigue.

mr pinnion said...

Hi all

After much thought and contemplation, i am now of the opinion that IF (and notice the bigness of the if) the pics havent been photoshoped, then the only way to get the cut to look like that is if the bar was drilled and 'rodded' AFTER the cut was made.

I rest my case.


mr pinnion said...


And just for kicks, try and recreate the hand grips that he uses to hold the gold with.

Good luck with that.


Warren James said...

I'm going to keep adding any clues and evidence (for or against) as I receive it and if there's enough new developments then I can always spawn it off as a new post. I received the following public response from Tears of the Moon, over in the comments section of the original ABC Bullion blog (link is in the article):

"Hi Warren, no updates. Although I can assure you that we received the email from people that we deal with on a regular basis, so the email was real. They in turn they were dealing with someone that had some existing connection. Whilst this does not 100% prove the pics were real all parties in the chain of the email exchange knew each other."

Ok, that's useful info, i.e ABC Bullion confirm they know the sender and it sounds like some correspondence has taken place which confirms the relationship. This rules out a spoofed email direct to ABC (which would have been juicy conspiracy). Reading between the lines is fun - ABC trust the sender but don't know much beyond the refiner part.

The story got copied many, many times (I stopped counting after indexing 24 different websites). Only about four of these added some observations and original content. None questioned the authenticity of the images although a tiny percentage of commenters had something to say about the images looking fake. So here we're in the minority here.

mr pinnion, I too had difficulty recreating the hand grips of the guy in the photo - it's also one of the things which made me first suspicious.

One local bullion dealer has a kilo bar in a display cabinet (behind very thick glass) so I have a better idea of the real-world size of these things now. But talking to another bullion dealer on Friday, he hadn't even heard of the story (?!) so he didn't have an opinion. I did receive a great interpretation story in my inbox which would make a great webcomic. We also got pictures of an aluminium bar with Tungsten rods - a reader tried recreating the original conditions of the story - the photos are great fun and hopefully I can work them into a full article (on the assumption of further developments).

Warren James said...

.. found the original photos. Size is 1200 x 1600, suggests the origin is an iPhone (3 or 4). Have made a comment in my section.

Warren James said...

This article is getting a bit of attention and a few hits, what with the new discovery of a fake 10oz bar. Much has been said on the topic and many opinions vented on both sides, enough to merit a new post? Not really, but just wanted to add the following perspectives the benefit of having had a few months to think about them:

1. Tungsten bars are not bullish for gold - the opposite, for anyone who might have been considering gold as an investment. It's nothing to cheer about because it diverts dollars which may have been otherwise bidding the value of your gold up. This is what KD has maintained from the start.

2. A 10-ounce fraud is not really worthy of a general news item. No seriously. Hundreds of thousands of times this amount in dollars gets scammed from online scams every day.

3. In a day and age when a Volkswagen advertisement gets shown to you by your spouse because someone posted on their facebook wall, is it really inconceivable to consider that the easiest way to manage public gold sentiment is to put together a few fake bars and use social media to make the story go viral?

All I'm saying is that motive exists to spread stories of a certain type. These days if you hear about something it's because someone paid for you to notice it. Keen an open mind ...

Anonymous said...

Those who are worried about tungsten fake gold, why don't you consider paper gold?


Cullen said...

This just came through ZH. Enjoy,

Cullen said...

PS Warren, about those iPhone photos, see:

or sudo apt-get install exif (if you swing that way). Install "jhead" if you want to modify exif headers.

Warren James said...

Thanks Cullen.

Read that ZH article. I had a chuckle that silverdoctors is so incredulous that fake gold products can actually exist as a legitimate industry. Well, yup there's demand for it, kind of obvious when you think about it - movies are just one example but the world really is a big place full of interesting niche markets. For example, these guys make a lot of money selling their ... product :)

DavidJones said...

Crazy to see that tungsten gold bars are still an issue today. Even crazier to see that they pulled their own story!!!

Unknown said...

Kid Dynamite says above:

"fraudulent product is BEARISH for the underlying - not bullish - "

This seems to me very misleading because of the oversimplification. It seems to me that the more accurate way of putting it would be: "if a product is found to be fraudulent, this is BULLISH for the remaining non-fraudulent supply of the product, assuming said product is still desired by the market in generally the same amount. It is BEARISH for the underlying product if the entire supply of the product is found to be fraudulent, or if the implication is that that is the case... OR if the fact that ANY fraudulent product was found significantly decreases the demand for any other supply of the underlying product based on the general doubt cast upon all the other supply." or something like that.... In the case of companies shown to be frauds, obviously the stock of that company would tank. A fake version of a $2000 Louis Vuitton bag could be bought on the street for $50. That doesnt affect the fact that a LV bag can still be sold in stores for $2000. Some might argue that any fairly popular product will have cheaply made "knock-offs", that without this phenomenon of there being knock-offs of "originals", you dont really have a good "original". The idea being OF COURSE there is fake gold out there, that is de rigueur in a market for any valuable product. Just as there are fake diamonds, fake picassos, etc. When women start to question any gold bracelet you give them because it might contain tungsten, then there might be more of a problem. OBVIOUSLY you also want a substitute currency to have authenticity which is fairly verifiable. How many of you have had counterfeit paper currency pass through your hands though? Probably a fair number of you. The tungsten issue seems to be "noise" at this point. You buy 1000 gold coins.. you saw a few in half to check the product. Again, the issue seems to me to be "noise" at this point. If anything, probably slightly bullish. It shows people care.

Warren James said...

I removed my comment because it added no value, Elmer I am sorry I was rude.

But, I will still defend KD's statement because it is succinct. The vast majority of gold has controls against being fraudulent, and plastering tungsten stories everywhere generally has the effect of turning potential new investors away. Regards,