Fake gold can be produced by using another cheaper metal and coating the surface with real gold. This can be easily detected by weighing the object as the density of different metals are different.
For example, gold has a density of gold is 19.3g/cm3 while that of steel is 11.4g/cm3.
Therefore, a piece of real gold measuring 10cm x 10cm x 10cm would weigh 19.3kg while steel of similar size would only weigh 11.4kg. The standard gold bar held by central banks weighs 400-ounce (12.4 kg) and must be stored in recognized and secure gold bullion vaults to maintain their quality status and ensure maximum resale prices.
If the gold is of an irregular shape, the volume can be found be finding the displacement of water in a graduated cylinder.
The issue gets a bit more problematic when a fake material that has a close density to gold is used.
Uranium has a density of 19.1g/cm3 and would fit this criteria. However, it is radioactive so it is not that suitable.
Another metal is tungsten which has a density of 19.25g/cm3, almost similar to gold. Thus, a gold-coated tungsten would pass the density test with ease. However, tungsten is extremely brittle and has the highest known melting point of any non-alloyed metal at 3422 degrees Celsius, which makes it difficult to work with.
Short of cutting up a gold bar to see whether it is tungsten at its core,
other ways of testing for gold fakes would be to use sound (sound travels at twice the speed in tungsten compared to gold), electrical resistance or thermal conductivity.
The Gold Label is another company in Malaysia that operates with a similar model to
Genneva Gold. They sell you gold at a discount to the listed price and offer a guaranteed buyback at the listed price after the end of a specified period of time.
I don’t have the exact details of the terms but I would caution anyone from joining such “guaranteed buyback” schemes. I will post more details of the Gold Label scheme once I have it.
My earlier post on
Genneva Gold has already attracted close to 500 comments; you can refer to it to read some of the arguments for and against such schemes. Some of these comments would be applicable to The Gold Label as well.
Someone sent me a question to ask me about
Genneva Gold Sdn Bhd.
According to the information on the website, Genneva Gold sells you Gold Bullion at a 2% discount to the market price with a buy-back guarantee.
At the end of one month, the buyer can
Sell buy the gold to Genneva Gold at the market price based on the time he bought (thus making an immediate 2% profit)
Keep the Gold Bullion.
Rollover. Meaning do step one and buy a new Gold Bullion at a 2% discount to the current market price.
The deal seems too good to be true because the company is essentially selling you gold at a 2% discount and giving you a free put option.
There doesn’t seem to be any downside for the investor. If the price of gold goes down, he can sell it back to the company. If the price of gold goes up, he can keep the gold and sell it on a secondary market by himself.
genneva gold
Anyone considering this investment should ask important questions like:
How does Genneva Gold generate revenue/profit from this entire transaction?
Assuming an investor does just the bare minimum and rollovers his investment for 12 months, he would have made a 24% return. How does Genneva Gold substain this payout?
How do you verify that the gold you receive is worth its weight in gold?
There is a “Terms and Conditions” to the 2% discount thing though. I would be interested to know what they are.
Societe Generale’s wholly owned subsidiary Lyxor Asset Management, has listed five new Exchange Traded Funds (ETF) on SGX recently. These ETFs track the performance of four Asian equity and one commodity-linked fund:
MSCI Thailand
MSCI Malaysia
MSCI India
MSCI Asia APEX 50 (an index made up of 50 stocks in China, Hong Kong, South Korea, Singapore and Taiwan)
Reuters Jeffries CRB Non Energy
This brings the total number of ETFs listed in Singapore to 24.
The transcript of the interview provided by my friend of
InvestIdeas Forum and with additions done by me can be found below:
China Journey
Media: You travel a lot, what do you see in ordinary people?
Roger: You learn more from the ordinary people than you do from the government.
I mean, I could go and see the government officials, I know what they are going to say. I can say it better than they can. I’ve been investing around the world and going around the world for a long time.
Where you can really find out what’s going on about the world is to see the world close to the ground and talk to ordinary people.
You cross the border and you are going to find out more about the country than if you fly into an international airport and go through customs and immigration. Because millions of people live across the border out in the jungle or in the deserts, and then you get to find out what’s really happening.
Media: Could you describe an unforgettable moment while you were travelling in China?
Roger: Well, I have been to China many times. I was in Hami, Xinjiang (哈密、新疆). It was the first time I drove across China. They didn’t have many hotels in those days.
I went into the hotel. It was very hard and I couldn’t figure out what it was. And then I realised it was a bag of rice. They gave me a bag of rice for a pillow. There was no tourist in China, nobody travelled in China. That’s when I realised a great opportunity existed in China as it continued to open up because there was no tourism.
And that’s what I now know, there’s fabulous opportunities for tourism in China.
Where to put your money
Roger: Things that are going to come out of this unimpaired is where you should have your money. And (one of) the many things that I know of is going to be commodities.
Most companies and most especially financial companies have been damaged. Now,they are not going to be great stocks. Coming out of it, I’m saying the fundamentals that have not been impaired – agriculture, water treatment, tourism in China, things like that. I have no idea what kind of (—) you can expect. I think all commodities will do well.
Stocks
All have been beaten down right now. I’ve covered a lot of shorts on Thursday. I’ve been covering shorts and when you have a panic like this, it means you always think you should be buying – who knows. I think even if you have a rally from here, it could be a bottom is being formed, but I don’t think it’s the bottom yet.
Singapore Financials
Media: What can Singapore learn from this crisis?
Roger: Singapore has learnt a great lesson. Save your money. Save a lot, invest wisely and don’t do a lot of foolish things. Your government is not printing a lot of money and doesn’t seem to be printing money.
So far from everything that I can see, Singapore government is doing the right thing. Now, Singapore is going to be affected by all of this, but Singapore has more foreign currency reserves per capita – than any other country in the world that I know of. The last country standing is going to be Singapore.
New Market Opportunities
Media: What are the new markets and opportunities?
Roger: The new stock market in Cambodia which should start next year if it’s on schedule. It might do good things for Cambodia. I’m optimistic about Cambodia. Myanmar is another place that has magnificent opportunities.
It is changing, and places that have the best opportunities are probably the ones which haven’t been exploited, such as, Myanmar, Cambodia and North Korea. They are starting to open up slowly. That’s where you’ll find the best opportunities, going forward.
Stage (From Left to Right): Professor Gillian Yeo, Executive Associate Dean, Nanyang Business School; Ms. Elim Chew, Co-Chairperson, Culture & Education Action Crucible, Action for Community for Entrepreneurship (ACE) and Member, NUS Board of Trustees; Mr. Jim Rogers; Professor Bernard Yeung, Dean & Stephen Riady Distinguished Professor of Finance, NUS Business School.
Photo Courtesy of National University of Singapore Business School.
Therefore, a piece of real gold measuring 10cm x 10cm x 10cm would weigh 19.3kg while steel of similar size would only weigh 11.4kg. The standard gold bar held by central banks weighs 400-ounce (12.4 kg) and must be stored in recognized and secure gold bullion vaults to maintain their quality status and ensure maximum resale prices.
