Chinese Gold


wealthymatters.comHere is a piece of news I came across.Since so many Indians consider shopping in HK these days I think the following clipping  is a must read.

Fake gold scam hammers Hong Kong jewellers

 With the gold price sitting at record highs, Hong Kong jewellers and pawn shops have been hammered by one of the most sophisticated scams in which hundreds of ounces of fake gold were traded in the market.

The gold-mad city has woken up to a massive scam as investigators discovered that at least 200 ounces of fake bullion, worth about $250,000 have been traded at the island`s fabled jewellery souks so far this year, Financial Times reported.

“It’s a very good fake”, said Haywood Cheung, president of the Chinese Gold and Silver Exchange Society, Hong Kong’s hundred year old gold exchange, highlighting how criminals are developing new techniques to commit an age-old fraud.

 Though officially only 200 ounces of fake gold was recorded as traded, Cheung estimated that 10 times that amount might have infiltrated the retail market. Describing the swindle as ” one of the most sophisticated scams to hit Hong Kong gold market in decades”, the Financial Times said it has come when the price of gold has soared to record highs of $1,400 an ounce.

In one case, executives discovered a pure gold coating that masked a complex alloy with similar properties to gold. The fake gold included a significant amount of bullion — about 51 per cent of the total — alloyed with seven other metals: osmium, iridium, ruthenium, copper, nickel, iron, and rhodium.

 The complex nature of the fakes suggest they were produced by a metalsmith with sophisticated equipment and extensive knowledge of metallurgical engineering.

So real did the fakes look that even some of the Hong Kong’s leading jewellers like the’ Luk Fook Group’ were tricked into buying some before it put its chain of stores on alert.

 “This was the biggest hit ever”, FT quoted Paul Law, executive director of the firm as saying and experts say that the highly sophisticated equipment was used to fake the bullion.

The fakes were extremely hard to detect by sight and touch alone.In most cases, they passed basic scrutiny, only to be revealed later by more sophisticated tests involving high temperatures and chemicals.

In the past, counterfeit gold in Hong Kong and the rest of Asia was either rough and easy to detect, even to the naked eye, or involved gold-plated tungsten, a metal with a similar density to gold, but which traders and jewellers can easily identify.

The scam targeted the sale of scrap gold to jewellers.

                                                                     

The moral of this story is —– If you must buy gold in HK , go about  it as if you were buying an expensive souvenir that may become valuable . Pay for for the foreign workmanship , the novelty value of the item and the memories it will evoke and if it is to be a gift – the pleasure it will give the recipient.In any case there are many parts of the world where 14k and 9k gold seems to be the only stuff found in shops,so even the 51% debased stuff at HK might not be such a bad buy for a souvenir as long as you are not under the misapprehension that you are buying Chuk Kam.Remember if the gold is drawn very thin or the casting looks very clean,the gold is likely to be less pure.

About Keerthika Singaravel
Engineer,Investor,Businessperson

One Response to Chinese Gold

  1. Mike says:

    Great Post

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