After a counterfeit gold bar was sold by a Royal Bank of Canada (RBC) branch with what appeared to be proper markings, the Royal Canadian Mint determined the bar – containing no gold whatsoever – wasn’t produced at a Mint facility.
The one-ounce “pure gold” bar was purchased by Ottawa jeweller Samuel Tang at a local RBC branch this October; however, Tang’s initial testing of the bar showed no signs of gold. After the Mint and RBC initially refused to accept the returned bar, Tang contacted CBC News and expressed his concerns about counterfeits on the market.
RBC then retrieved the bar and and returned it to the Mint for testing while refunding Tang the purchase price of $1,680. The Royal Canadian Mounted Police were also made aware of the incident.
“The Mint did not manufacture, ship or sell the above-mentioned product,” the Mint said in a statement following its investigation, adding the ensuing media coverage has “raised unfounded speculation as to the origins of the counterfeit and the purity of Royal Canadian Mint bullion products.”
On Oct. 18, Tang purchased the supposedly pure gold bar from an RBC branch at 745 Bank St., which is directly across the road from his store, Joy Creations, in a neighbourhood known as the Glebe in Ottawa. Tang’s business specializes in designing and producing hand-crafted jewellery in his on-site goldsmithing workshop.
Tang’s goldsmith, Dennis Barnard, cut open what appeared to be an authentic Mint blister pack and placed the one-ounce bar in a tableting tool. He noticed the bar was difficult to roll and bend – two traits of pure gold, malleability and pliability – and when he finally bent the bar, it snapped horizontally and left a jagged line. Finally, Barnard used an acid testing kit and found the gold had a purity of less than 18 karats.
CBC News then brought the same “gold” bar to Ernest Marbar, owner of the Gold Lobby, an Ottawa-based precious metals buyer, who said the bar failed an acid test for 14-karat gold.
Barnard told CBC News he isn’t overly worried about goldsmiths like himself being fooled by fakes; however, he and Tang are both worried about investors who might leave their gold bars in the Mint’s packaging.
Despite the worries, the Mint claims counterfeiting of its products is “extremely rare” and described the recent incident as “an isolated case.”
William Rentz, a professor at the University of Ottawa’s Telfer School of Management and an investments and equity expert, told CBC News the discovery of a counterfeit gold bar could undermine consumer and investor confidence, which is a “serious problem.”
“If the trust disappears, it could be seize up the market, at least temporarily.”
Another financial analyst, Brian Bosse, shared similar concerns with CBC.
“This is not a one-off. Nobody does this once. The real question is, how did this get into RBC’s inventory?” asked Bosse, whose Toronto-based employer Murenbeeld & Co. forecasts gold prices for the mining and investment sectors.
“It boils down to product knowledge,” former CCN Trends editor Sean Isaacs told CBC News. “And the first line of defence is knowing what you’re dealing with.”
Isaacs, who’s the owner of Almonte, Ont.’s Alliance Coin and Banknote, uses a Sigma Analytics precious metal verifier worth more than $1,000 to authenticate bullion, something that’s vital when dealing with precious metals.
“The average teller at a bank I don’t think has the training to recognize those products, which is why, in my opinion, you either need a tool to allow you to do that, or the product knowledge to know what you’re handling.”