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ThrustVectoring comments on Harry Potter and the Methods of Rationality discussion thread, part 26, chapter 97 - Less Wrong
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When a muggle handles fake gold and it doesn't work as a conductor, the Statue of Secrecy comes in and they get Obliviated and the gold gets swapped over so that it works properly.
If most Muggle gold is a clever Wizard fake, then the fakes are getting watched to ensure that those who handle the fake gold stay convinced that it's real gold.
That's an awful lot of surveillance. Would a spell which detects a Muggle trying to use jewelry/store of value gold for conduction and sounds an alarm be possible?
Well, it's magic. Meaning 'If the author wants it to be'.
That's not what it means in this fic.