Business

Online stores ‘awash with fake gold’

WITH gold price having climbed to an eight-year high buyers are warned to beware of fake gold bars being sold at online shops, Mrs. Duangkamol Jiambut, director of Gem and Jewelry Institute of Thailand (GIT) said today (July 7, 2020).

Called “stuffed gold” in Thai, these fake gold bars are actually copper or lead gilded with a layer of real gold. Criminals are taking advantage of soaring gold price to sell fake gold in various forms, particularly gold bars, with this affecting the market.

An investigation in Thailand has found that it is at online shops that these fraudsters are selling fake gold to buyers eager to either collect the precious metal, trade in it or wear it as an ornament.

Mrs. Duangkamol said buyers will not be able to make out whether a gold bar is real or not just by looking at it with the naked eye because they are gilded with real gold and the baser metal is of similar weight.

At a gold shop, files are used to determine whether a gold bar is real or not but this does not really help because of thick gilding.

GIT recommends that people buy gold from a shop they know well or those that display the Buy With Confidence (BWC) logo. Also check the hallmark for the purity of this precious metal to prevent being deceived.

GIT is at present in the process of establishing a standard precious metal testing laboratory (GIT Standard) with this being at ISO level. This will ensure that the same standard applies nationwide and will help build confidence.

The Gold Traders Association set today’s price of gold at 9:27 a.m. as follows:

Gold bars, 96.5%, selling price 26,250.00 baht and buying price 26,150.00 baht.

Ornament gold, 96.5%, selling price 26,750.00 baht, tax base 25,681.04 baht.

This problem is global with it being reported on June 29, 2020 that Nasdaq-listed and Wuhan-based Kingold Jewelry (KGJI) used 83 tons of gold bars as collateral to secure the equivalent of US$2.8 billion in loans from more than a dozen Chinese financial institutions. Or did it?

Those gold bars instead are copper with a nice coating of gold leaf, according to a cover story in China’s pre-eminent business publication, Caixin. The banks and trusts allegedly made this nasty discovery after Kingold defaulted on debts in late 2019, causing one of its lenders, Dongguan Trust Co., to try to sell the gold, Realmoney.thestreet.com reported.

Kingold’s chief financial officer, Bin Liu, works out of a Manhattan office on 8th Avenue. The company fashions 24 karat jewelry. Its purchasers may want to check the quality of their baubles. Copper is a lot less dense than gold, and their expensive purchases may be feeling a little light.

The company was founded by a well-connected former Chinese military man, Chairman Jia Zhihong. His Wuhan company’s problems pre-date the coronavirus, but the cash crunch caused by the temporary collapse in customers cannot have helped Kingold’s attempts to rebound.

After Dongguan Trust’s surprise, Kingold’s largest creditor, China Mingsheng Trust Co., ordered a court test on its collateral gold bar before Kingold’s debts came due. The results, which came back May 22, said the bars sealed in its coffers are also copper alloy. Two other lenders reportedly ran tests and came to the same conclusions.

CAPTION:

Fake gold bars with baser metals exposed. Photos: INN News

 

Nina
I am veteran journalist and part of ThaiNewsroom.com’s editorial team. We are working hard at making this news site a success and value the support of each and every reader
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