Gold bars, gold bullion, or gold ingots are essentially a mass of refined gold formed into a flat bar, brick, or card shape. They’re made according to strict manufacturing standards and require precise labeling and record-keeping.
A gold bar itself can be traced using the serial number imprinted upon it, linked to the refinery that made it. Certain minted bars are also sealed in packaging that includes a holographic identification chip. Although the physical gold bars themselves can be traced to their manufacturer, the gold’s origin cannot reliably be traced.
Gold is considered a smart investment and an easy way for banks to trade among themselves. This article will look at how the gold bar is made, why and how it is bought and by whom, and how gold can be traced in its various forms. We’ll also discuss where this tracing falls short once the refinery process begins.
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The Manufacturing Process of Gold Bars
Gold is a precious commodity, and it is one of the few metals that won’t corrode or degrade over time. It also has various uses, with one of the simplest being the manufacture of gold bars.
Cast gold bars are usually made directly from molten gold. Most refiners will use their own variations for the casting process, but the main goal of melting down gold and casting it into bars of specific weights and sizes will remain the same.
Gold bars are manufactured by reputable, accredited government and private minting institutions. These include the likes of Credit Suisse, Perth Mint in Australia, the British company Johnson Matthey in the US and Canada, Asahi in Japan, and the Royal Canadian Mint. The more well-known the manufacturer is, the easier it will be for you to sell the gold bar later (source).
Cast Bars
Cast bars are roughcast by pouring molten gold into a mold and are generally not very shiny, differing in appearance depending on the pouring and cooling method. Some have an irregular appearance and may even look gritty.
Cast gold bars are usually stamped with a serial number, under 11 digits, and the manufacturer or refiner’s details. The London Bullion Market Association (LMBA) is the leading authority on the over-the-counter gold market
Even though these bars tend to be less sleek and shiny in appearance, many gold bar purchasers actually prefer this type as it makes the bars look more natural and speaks to the long and impressive history of gold.
Minted Bars
Minted gold bars differ from cast bars in that they’re shiny and sleek and generally perfect. These bars also tend to be thinner and look more like cards than bars. The process for making them also differs from cast bars as they are either hand-cut or punched from a large, flat piece of gold.
Some minted bars even incorporate artistic designs on their glossy exteriors, but the design, albeit aesthetically appealing, will have little to no effect on the value.
For example, Johnson Matthey gold bars contain the distinctive Johnson Matthey logo of crossed hammers next to the initials JM, followed underneath by “JOHNSON MATTHEY ASSAYERS & REFINERS,” the fineness of the gold (assay), the weight in Troy ounces, and then a six-digit serial number when they have one at all (source).
Minted bars are often smaller than cast bars and, depending on their size and manufacturer, can be packaged in protective coverings that can be used to trace the bar back to its manufacturer. Coverings will not only protect the bar but also be printed with the refiner’s details, a serial number, and/or authentication number.
Occasionally, since it is packaged in protective plastic with a card displaying information, some of the minted bars include a hologram security feature, which is a chip, also called a Kinegram. These bars are usually known as Kinebars
Tracing Gold Bars
Gold bars can be traced in one of two ways. For one, bars are stamped with serial numbers that can be traced back to their manufacturer. Secondly, some refineries also place their logo, mark, or some artistic design onto bars as a means of identification.
The Serial Number
Some of the smaller bars (below 1g) are impractical to stamp with a serial number and should, therefore, be sealed in protective packaging, which should then be stamped with a serial number. As an investor, you must keep a list separate from your gold that details all your serial numbers so that you can prove which bars are yours.
The Holographic Chip
Minted bars often incorporate serial numbers as well, but since they are packaged in protective cases, the refineries have started adding a holographic identification chip into the packaging. This holographic chip carries details of the gold bar and its refinery, and, in this way, it can be traced back to its manufacturer.
Tracing Gold
Image by Linda Hamilton via Pixabay
Although it is fairly easy to trace a gold bar back to its refinery or manufacturer, and even to its owner through using the serial number or the holographic chip, it is much more difficult to trace the actual gold to its original source mine.
Although some less refined gold carries what is known as a “gold fingerprint,” a gold bar often does not because a refinery has melted it down.
Gold can be traced back to a particular source mine through analysis that pinpoints impurities. However, if the gold has been refined, these trace elements and impurities can be removed by the refining process, making gold almost impossible to trace back to its original source.
As soon as gold enters into the smelting process, it enters the final point at which it is chemically possible to analyze and determine the mine of origin scientifically.
Additionally, the gold may have come from many different sources, and the history is muddled when it’s all melted together, giving an inaccurate indication of where it’s from.
Once gold enters the process where it is cast into items other than gold bars, such as jewelry or watches, the gold has undergone so many changes and mixes that it is virtually impossible to trace.
Unfortunately, there is also gold smuggled and illegally traded across the world. That is why refineries are cracking down on their security. Some add identifiers to the gold they produce to assure their buyers that it is ethically, responsibly, and legally sourced gold.
One refinery in Switzerland started taking high-definition photographs of the surface of their gold to assist in traceability. One of the mines in Scotland impregnated their gold with a chemical signature, making it easier to trace
Of course, this is not done everywhere, and it adds to the overall cost, but it is one of the most significant aids in the fight against smuggled gold.
Buying Gold Bars
Although currency in the US has been backed by government decree rather than gold since 1971, gold is still a sound investment. Gold still plays an important part in our modern economy and has been successfully preserving wealth for thousands of years.
There are many ways to invest in gold, and buying the physical product is just one of them. However, as people generally like to see where their money is going, buying gold bars is fairly commonplace for those wanting to invest.
Additionally, gold bars come in many shapes and sizes, with some small ones increasingly affordable to the layman.
Over the past decade, approximately two-thirds of all investment into gold was done by buying gold coins or bars. Additionally, many people sell gold bars over the years when needing extra cash on hand. That is why it is important to consider the size of the bars you’re buying before committing to the purchase.
If you’re buying large gold bars, when the time comes that you’d like to sell them, you’re liquidating a very large and valuable asset at once as you cannot break up a gold bar. That is why it is often the wiser choice to invest in several smaller bars instead of one big bar.
Unfortunately, gold is also susceptible to scams and forgery. Those interested in buying gold bars should always ensure that they are getting them from a reliable source. Gold scams are abundant where scammers try to con inexperienced investors out of their money.
Additionally, large crime syndicates often fraudulently stamp the serial numbers and logos onto gold bars to launder illegal or smuggled gold. Generally, professionals can determine if the serial number and refinery marks were forged, so this is often discovered, albeit too late.
Final Thoughts
Gold bars, also known as bullion bars, can be traced back to their original manufacturer or refinery by the serial number stamped upon it along with the refinery logo. Some minted bars even carry holographic chips that also act as a means of identification.
Although serial numbers help us trace gold bars, the actual gold in a gold bar is difficult to trace to its source mine due to the refining process and the fact that gold from different sources is often melted down together.
Nevertheless, gold remains a worthwhile investment for those interested in investing in one of the oldest yet most stable currencies in the world.