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Testing Gold the Archimedes Way

February 13, 2011 18 Comments

I’m sure most people have heard the Archimedes story.He was the Greek guy who got out of his bath tub and ran,naked, down the street,shouting Eureka!Eureka ! I’ve Found It !

Just to refresh memories,here is the story:

Archimedes was a Greek scientist who lived in ancient Syracuse . The King of Syracuse wanted a gold crown made. So he gave some gold to a goldsmith to have one made. After few days, the goldsmith brought the finished crown to the King. The King had the crown weighed. He found weight of the crown to be equal to the weight of the gold he had given the goldsmith . However the color of the crown made the King suspicious. He believed that the goldsmith had pocketed some of the gold he had been given for his own personal use. The King wanted to find out the truth. So he asked his court scientist Archimedes to find out how pure the gold in the crown was.Obviously Archimedes could not melt down the new crown to determine its purity.So to find a solution Archimedes thought about the problem day and night. One day,while he was preoccupied thinking about this problem, he proceeded to take a bath. He was so preoccupied that he failed to notice that the water in his bathtub was already full to the brim.So as he got into into the bathtub ,a large quantity of water flowed over the rim . Archimedes noticed this and had a brainwave . He was so excited to have at last found the solution to the King’s problem that he jumped out of the bathtub,and ran naked down the street, shouting, “Eureka! Eureka!” Eureka in Greek means ‘I have found it.’ Read more of this post

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Investing in Gold Sovereigns

January 23, 2011 26 Comments

The British sovereigns are gold coins with a nominal face value of one pound sterling or twenty shillings.They were first issued in 1489 and still continue to be issued till date. All post-1837 sovereigns are still legal tender in the UK.

The name “sovereign” comes from the large size and portraiture of the coin, the earliest of which showed the king facing, seated on a throne, while the reverse shows the Royal coat of arms on a shield surrounded by a Tudor double rose.

At the height of the British Empire, gold sovereigns were well regarded and accepted as money throughout most of the world and used to settle dues between countries.The gold-standard may be no more, but the good reputation of the gold sovereigns for purity persists to this day and they are the most widely traded semi-numismatic gold coins in the world.In many parts of the former British Empire sovereigns are included in prized jewellery. There is a ready market for these gold coins worldwide,especially in the commonwealth, so they are pretty liquid investments. Read more of this post

Filed under Alternative Assets, Precious Metals, Theory Tagged with 22 Carat Gold, 22 Karat, 22k, Alternative Assets, Bullion Investment, Bullion Purchase, Gold, Gold Investment, Investing In Gold, Numismatics, Passion Assets, Sovereigns

The Dirty Truth About Indian Gold

January 21, 2011 7 Comments

Here is an article that appeared in the TOI in Jan ’09.If you invest in Indian gold jewellery,this article might just persuade you to have a fire assay done on your hoard to determine its fineness.

ALL THAT GLITTERS IS NOT GOLD

Your wedding jewellery may not be as pure or as precious as you think it is. Several goldsmiths across India have taken to adulterating the precious metal with iridium and ruthenium,and are getting away with it, as until recently the metals failed to show up on all purity checks. It’s an alchemist’s dream, and the practice is becoming increasingly commonplace if you go by the stocks of the ‘duplicate’ metals at even the smallest of karigar workshops.

Both iridium and ruthenium belong to the platinum family of metals, and when mixed with gold, do not form an alloy but sit tight in the yellow metal.

What makes the adulteration even more alarming is that the metals do not replace silver and copper, which are added to the gold during the jewellery-making process to harden the soft, malleable yellow metal. As Saumen Bhaumik, general manager (Retailing) at Tanishq put it, “The two metals manage to camouflage as gold.’’

TOI tested several pieces of jewellery, and all had some amount of either iridium or ruthenium lurking inconspicuously with the gold. A 22-carat gold bangle bought in 2003 from a century-and-a-half-old jeweller—who has since then expanded from Mumbai to other parts of the country—when tested at the Indian Institute of Technology-Bombay, had 3% iridium in it.

A gold chain bought from a shop in Bangalore in 2002 when tested at another citybased centre had 2.39% ruthenium, while a pair of earrings from Kerala was found to be adulterated with 4.65% of iridium.

On an average, a piece of jewellery or a bar of gold contains nearly 5-6% of the adulterant, and manufacturers—wholesalers and retailers across India—are aware of how rampant this notorious practice is. Consumers, however, are the biggest losers as they have been kept in the dark. Read more of this post