Singapore Bullion Market Association

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Safeguarding the Bullion Market’s Integrity

By KL Yap, Refining Business Unit General Manager, Metalor Technologies

Published on January 17, 2019

Metalor Technologies explains the company’s latest innovation to protect the integrity of bars on the bullion market.

In recent years, the precious metals market has seen an increasingly worrying number of fake and counterfeit kilobars.

Fake bars are ingots that do not contain the expected amount of gold – either because they are not in gold at all, or because they include other metals. A typical example encountered in the market is gold bars containing tungsten rods, which are very difficult to detect without advanced equipment as tungsten and gold have the same density.

Counterfeit bars are made of real gold, but they carry reproductions of hallmarks of renowned manufacturers and forged serial numbers. Such ingots are typically generated by illegal activities and hence, are highly problematic as they damage the reputation of companies and compromise the integrity of the international gold market. The integrity of the gold bullion market relies on gold market stakeholders working together against all types of counterfeiting activities.

Machine-assisted verification.
Verification using a flashlight

Detecting fake or counterfeit bars is not easy, though there are equipment available to do so, such as the Sigmascope from Helmut-Fischer, as well as ultrasound detectors. Some refiners have developed procedures to scan the surface of their bars to identify them later. However, all these methods require expensive tools and are time-consuming, rendering their use impractical when a single transaction can comprise hundreds of bars.

To overcome those issues and safeguard the bullion market integrity, SICPA, the leading Swiss provider of global security solutions for currencies, and Metalor Technologies have jointly developed a technology-based security feature in line with LBMA guidance, known as BullionProtect.

BullionProtect is based on a security feature transferred directly on the surface of the bullion, leading to a marginal weight increase (ca. 10 mg), which is not detectable by scales used for kilobar verification. Its security is built on proven technologies with high counterfeit robustness, which have been used in specialised markets like passports for more than a decade.

BullionProtect allows all actors within the supply chain to verify the authenticity of precious metal products at three levels:

  • Visual check of security seal
  • Quick verification using a blinking light system or validator
  • Machine-assisted detection using a hand-held device
Visual verification of the seal’s polarisation properties using a validator

imple and immediate verification of security seals can be performed with high throughput even in limited space, without adequate lighting and without an internet connection – 100 kilobars can be checked in less than 1 minute.

It is compatible with existing and potential security measures without impairing gold purity at all stages of production, delivery, transaction and recycling – the inks burn upon melting without adding any impurity in the gold. It is cost-effective and time-effective – no change on production procedures is required, and there are minor cost adjustments, with no or minimal investment. The seal is very robust, but is destroyed upon removal. Additionally, BullionProtect is compatible with any bullion and is customisable and scalable to different market needs and evolving demands.

Metalor Switzerland is already adding the BullionProtect security feature on its newly produced kilobars, with Metalor Singapore to follow shortly. Other refiners are currently considering adopting this solution, which is open to any producer on the LBMA Good Delivery list.

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KL Yap is the Refining Business Unit General Manager of Metalor Technologies Singapore, overseeing the development of the precious metal refinery that opened in June 2014. He worked in refining and heavy industries before joining Metalor in 2013