China has a “fake gold” problem, and more and more locals are being cheated | Wilnesh News

Gold’s recent rally has sparked a gold rush, but it has been followed by a surge in gold scams in China.

Thousands of Chinese have been tricked into buying “fake gold” – low-quality or artificial gold – after trying to buy so-called “999 gold” online. According to the government.

The purest gold is often called 999 gold because it contains 99.9% gold. Sometimes called 24 karat gold.

Shaun Rein, managing director of China Market Research Group, said: “Fake gold is becoming a major problem in China as more and more Chinese people look to invest their savings in gold.”

China will surpass India to become the world’s largest gold jewelry buyer in 2023 and become the leader in gold bar consumer demand.

Data from the World Gold Council shows that Chinese consumers purchased 603 tons of gold jewelry last year, an increase of 10% from 2022.

Rein added: “Demand for gold coupled with inexperienced Chinese consumers and investors’ inability to differentiate between 24-carat and lower-quality gold has led to the proliferation of scammers.”

Reports of increasing gold fraud continue to emerge local media and consumer protection sites such as Black Cat Tousu, a third-party consumer services platform owned by tech giant Sina.

one user Five gold pendants were reportedly purchased for 1,985 yuan (approximately $280) A man on online e-commerce platform Taobao said he discovered the gold was fake after a flame test.fake gold darken or appears green when held under a flame, while pure gold becomes brighter when heated.

another user complain Bought a gold product from online retailer Pinduoduo, but it arrived rusty. The user claimed to have taken it to a jeweler for appraisal, but was told it was a fake.

Taobao and Pinduoduo did not respond to CNBC’s requests for comment.

To protect consumers from scams, the Chinese government recently released information on how to Identify the authenticity of gold jewelry.

Techniques include listening to the sound a gold object makes when dropped on the floor, or dripping nitric acid onto it. If the acid drop appears green, the gold object is either made of another common metal or is plated with gold. The guide states that if nothing changes in the gold, then the gold is most likely real.

In addition, Nikos Kavalis, founding partner of precious metals research consultancy Metals Focus, said that consumers familiar with gold can identify fakes through its weight, size and volume.

“Depending on the design, fake jewelry can also be identified by its hardness – 999 gold is very soft,” he added. That said, aside from obvious signs and testing, it’s still difficult to determine whether a fake has been sold.

“The main thing consumers can do to protect themselves is to buy from reputable sources, whether online or in-store,” Cavalis said.

Counterfeit goods are nothing new in China.economic power World leader in counterfeit and pirated productsdriven by buyers who are unaware they are buying fakes and those who actively seek out fakes.

Counterfeit goods abound on Chinese e-commerce platforms, “from gold to pirated Chanel handbags,” said Lane of China Market Research Group.

The World Gold Council said that despite this, online gold sales, although developing rapidly, still account for a small part of China’s gold consumption, and most people still prefer to buy offline.

“The World Gold Council reminds consumers not to trade suspiciously low prices for the security of their purchases,” the international trade association told CNBC.

Gold prices retreated last week after rising to record highs in recent months.this spot price Gold is currently trading at $2,302.76 per ounce.