22 Karat | wealthymatters

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

Filed under Precious Metals Tagged with 22 Carat Gold, 22 Karat, 22k, Adulterant, Aduteration of Gold, BIS, Fire Assay, Gold, Gold Adulteration, Gold Alloy, Gold Investment, Gold Purity, Hallmarked gold, Hallmarked Gold Jewellery, Hallmarking, Investing In Gold, Investing in Gold Jewellery, Iridium and Ruthenium, Platinum Group Metals, Refinery

Chinese Gold

January 20, 2011 1 Comment

Here is a piece of news I came across.Since so many Indians consider shopping in HK these days I think the following clipping is a must read.

Fake gold scam hammers Hong Kong jewellers

With the gold price sitting at record highs, Hong Kong jewellers and pawn shops have been hammered by one of the most sophisticated scams in which hundreds of ounces of fake gold were traded in the market.

The gold-mad city has woken up to a massive scam as investigators discovered that at least 200 ounces of fake bullion, worth about $250,000 have been traded at the island`s fabled jewellery souks so far this year, Financial Times reported.

“It’s a very good fake”, said Haywood Cheung, president of the Chinese Gold and Silver Exchange Society, Hong Kong’s hundred year old gold exchange, highlighting how criminals are developing new techniques to commit an age-old fraud.

Though officially only 200 ounces of fake gold was recorded as traded, Cheung estimated that 10 times that amount might have infiltrated the retail market. Describing the swindle as ” one of the most sophisticated scams to hit Hong Kong gold market in decades”, the Financial Times said it has come when the price of gold has soared to record highs of $1,400 an ounce.

In one case, executives discovered a pure gold coating that masked a complex alloy with similar properties to gold. The fake gold included a significant amount of bullion — about 51 per cent of the total — alloyed with seven other metals: osmium, iridium, ruthenium, copper, nickel, iron, and rhodium. Read more of this post