As Fox News NY reported, "What makes it so devious is a real gold bar is purchased with the serial numbers and papers, then it is hollowed out, the gold is sold, the tungsten is put in, then the bar is closed up. "
What to do ? SEEKING ALPHA contributor 'The Financial Lexicon' offers the following advice in a recent post :
First, stay small. There is less economic incentive to fake a gold coin as opposed to a gold bar. It doesn't mean there aren't fake gold coins floating around (there are). But if you stick with a reputable dealer, and you know what a real coin looks like, you are less likely to get scammed than you might be when purchasing a gold bar. Moreover, if you are nervous about buying a fake gold coin, you can always choose to purchase coins that dealers have purchased directly from the U.S. or Canadian Mints.
Additionally, if you are worried about fake silver coins, you could consider purchasing some of the older 90%, 40%, or 35% silver coins that used to be in circulation. These include silver dollars, half-dollars, quarters, dimes, and nickels. There would far less economic incentive to fake these coins. Although, again, it does not mean that fakes don't exist.
Furthermore, regarding silver bars: if you want to purchase physical bars and think you can avoid fakes by turning to silver, be aware that silver bars stuffed with lead are known to exist.
Finally, if the possibility of purchasing fake precious metals is a worry with which you do not want to concern yourself, you could always purchase the miners as a means of gaining exposure to precious metals. One of the more popular ways of diversifying exposure to the miners is through the Market Vectors Gold Miners ETF (GDX).