What is Doped Gold?
The word doping is something that people generally associate with professional athletes taking performance-enhancing drugs in order to be more successful in competitions. A recently uncovered scandal about doped gold involving Australia’s esteemed Perth Mint however has nothing to do with sports but instead with corporate greed.
In the world of gold bullion refining, doping is another word for alloying, that is the process by which other metallic elements such as silver and/or copper are alloyed with gold. The purpose of this can be to make the produced gold harder and therefore more scratch resistant. The 22 karat gold that the American Gold Eagles are made of is an example for such alloyed bullion that consists of 91.67% gold that has been alloyed with 3% silver and 5.33% copper. However, most gold bullion coins are of 99.99% purity and the same is true for gold bars.
The Perth Mint is one of the leading producers of gold bars in the world. You might think that such an esteemed institution would never resort to such measures as producing doped gold in an effort to marginally increase its profits, especially with gold bars that must always be at least 99.99% pure. The remaining 0.01% don’t leave much room for error and any mistake could cost the mint dearly in terms of lost reputation. Greed knows no limits however and the mint is now facing a potential $9 billion recall of gold bars from China.
While the doped gold bars that the mint delivered to China still achieved the required 99.99% gold purity, the amount of silver that the mint added to the alloy apparently exceeded allowable limits set by the Shanghai Gold Exchange. It remains to be seen how this issue will be resolved as China has export bans for gold in place which could make it impossible for the doped gold bars to be sent back to Australia for recasting. One thing is certain though, the reputation of the Perth Mint has taken a hit that other competing mints like the Royal Canadian Mint will seek to capitalize on in the coming months.