The point is comparing that volume to their mass, to arrive at their density. Tungsten and gold have very similar masses, but there is a difference. Take the mass of the bar (it’s weight), and divide it by the amount of water it displaced to arrive at density — that is the number that will differ.

Looking up the density values of various elements I find different tables have different values. This one says Tungsten is higher density than gold, but not by much. Look up Chemix density element chart for a cute graph of how density varies by element.

Density Element
19.32 Gold
19.35 Tungsten
19.84 Americium
20.2 Uranium
21.04 Rhenium
21.45 Platinum
22.4 Iridium
22.6 Osmium

This chart shows density with Tungsten less than gold.
18.95 Uranium
19.25 Tungsten
19.282 Gold
21.02 Rhenium
21.46 Platinum
22.610 Osmium
22.650 Iridium

2 ounces of gold is 2.33 cubic cc, which is non-trivial.

I would guess that three things could have happened to screw up this thievery.

1. They used a density chart that was different than the density of the tungsten metal the thieves actually got hold of. Their tungsten was slightly lighter than gold, but they had planned that it be slightly heavier. But they couldn’t make the bar 2.33 cc larger than than normal.

2. The other problem the thieves didn’t think through is that when you drill out gold and insert tungsten, there will be voids in the bar that will make it lighter. Tungsten has a melting point of 3422 C. Gold has a melting point of 1064.5 C. If they had a regulation mold, they could pour molten gold on top of their drillout. But they couldn’t melt the whole thing, or they would risk having the tungsten block move and become visible. So there would still be air-voids, small, but significant. If they inserted the tungsten, then just soldered gold back over it, the air-voids would be a big problem. It would take an expert machinist to match the holes in the gold bar so tightly there would be no significant voids. But if the did that, then they might need to do their work in a vacuum in order to make it possible to push the perfectly fitted tungsten in.

I think that is where most of the 2 missing ounces came from.

3. The thieves could also have had one of their number stealing tungsten from them. Tungsten is $23 per ounce. Let’s say the thieves took 200 oz of gold from 300 bars and one of them pocketed 2 oz of tungsten per bar. That would be 60,000 ounces of gold, which they could sell at a price of $1600 per ounce for $96 million.

The thieves would need to buy $1.38 million worth of tungsten to do that. I volume, they could doubtless get a discount off the $23 spot price. The tungsten thief could net himself 600 ounces of tungsten, which he could sell for around $12,000 (presuming he doesn’t get the spot price).

The Achilles heel among thieves is that they don’t like to share. There would probably be three men, at the very least, 2. One of them would be the money man who fronted for the tungsten. He would expect to get almost everything. One would be an organizer, perhaps an assistant for the job. And one would do the actual hand-work. It is usually the case with criminals that the guy doing the hard work is not terribly bright, and gets the short end of the stick. They probably paid him a pittance for his work. Let’s say they were “generous” and gave him $50 an hour. Let’s assume one hour per bar, for 8 or 10 hours a day, two guys. So that low man on the totem pole would net $15,000 for his work.

But, the low man isn’t a complete idiot, and if he was cunning he would realize that the smart guys would be watching the gold like a hawk, but wouldn’t be watching the tungsten so closely.

So the low man could almost double his take. What does he care if the big guys get nabbed eventually for their score?

Thanks TFF, for the laugh, but some people take their gold veddy seriously (In India… you are blaspheming with that tongue!) but being Tungsten is used in the best quality darts, I think I favour the tungsten.

It would be very difficult if not impossible to do that and finish it off to make it look authentic. Cast bars have a unique finish due to the casting process – trying to plug the drill hole ends with melted gold and then seamlessly blend that into the exiting bar surface is very hard.

“XRF (X-ray fluorescence) tests”

XRF does not penetrate very far into the surface of a bar, so is only good for testing plated bars. The industry uses ultrasonic testing, see here http://www.lbma.org.uk/assets/lbmaars200 9_14_genel_pamp_use_of_ultrasonic_analys is_for_the_quality_control1.pdf

“only a minuscule fraction of the gold bars in the world are physically traded”

The amount of turnover in the market is much higher than you think. In the case of the professional market which deals in 400oz bars, yes many of these sit in central bank vaults but many others are held by private investors and these are traded. There has been no occurrences in my 18 years in the industry, and I haven’t heard of others, of fake 400oz gold bars. Any bar coming out of a LBMA accredited refinery can be trusted because the refinery cannot control or know where the bar will end up and during its life there is a good chance a bar will eventually be melted for use by a jeweller or other refiner and as such there is a high probability of being caught out.

In the retail market I’d guess that turnover is a lot higher, particularly as retail investors do tend to exhibit herding behaviour, which means when there is selling it usually overwhelms retail buyers at that point in time. The end result is that in a net selling situation dealers do not sit on gold due to the high holding costs vs low profit margins and uncertainty as to when buying demand will return, so they liquidate that net selling excess back to refiners, where it is melted. Thus there is a fair bit of turnover and again, a good chance of fakes being detected.

“If there are 1.3 million salted 400 oz bars in existence, and each one is 75% tungsten, then that makes 390 million ounces of gold which in truth isn’t there.”

This is silly speculation as it would be impossible for such a level of fakery to not to come to the surface. You can be sure that a refinery would like nothing better than to find extensive fakes in its competitor’s product and thus put it out of business. The rest of your “on one hand” “on the other hand” adds nothing.

“there’s clearly now serious tail risk for anybody in the physical-gold market”

Based on your lightweight speculations you seriously think readers should consider the tail risk to be serious? If you buy from a reputable refiner from a reputable dealer you will not have any tail risk. This resource http://www.goldbarsworldwide.com/ is a good place to start if you are unsure of what bars should look like and their measurements.

(And I’m only slightly tongue-in-cheek.)

http://www.popsci.com/diy/article/2008-0 3/how-make-convincing-fake-gold-bars

Assuming (as stated upthread) that tungsten’s density is higher than gold’s, it shouldn’t be too hard to make a tungsten alloy that has exactly the right density.

A guesstimate would be much simpler if we had some estimate of how often gold bars are tested when they change hands. If this happens 99% of the time, there can’t be many salted bars. On the other hand, if most people don’t bother with a density test (and I’d be amazed if they don’t with something of that value, but I don’t know this market), there must be lots.

Just to get people who worry about this slightly more worried: gold-plated tungsten will fail the density test, but this is because tungsten is slightly *too* dense. Making sure you leave some small hole of the right size, or add the right amount of almost any other metal (most metals are less dense), should solve this problem. This is an example of a very shoddy forgery. Somebody who took their forgery as seriously as they should when we’re talking some decent money, should have no trouble at all producing bars of the right weight and density. As Felix points out, conductivity would still show… but frankly, I think any competent chemist should be able to produce a gold-plated bar that passes most tests except cutting it in half.