PETALING JAYA: Foreign syndicates are targeting local goldsmiths and consumers by passing off adulterated gold as high-purity scrap gold at prices well below market rates.
The Federation of Goldsmiths and Jewellers Associations of Malaysia (FGJAM) said although there were fewer than 10 cases over the past 18 months of adulterated gold being brought into the country by overseas syndicates, it had taken precautionary steps by alerting its members via a statement issued last week.
FGJAM president Pang Ann Puo said the scam is linked to members of overseas syndicates that have made their way into Malaysia offering supposedly high-purity 999 scrap gold.
However, he said the scrap gold contained alloys such as rhenium and tungsten, which have a density similar to gold and are sold to unsuspecting buyers.
“These sellers are usually foreigners and are not reputable gold suppliers. They do not operate from physical stores or have fixed business addresses and carry out their activities in a hit-and-run fashion.
“They offer low prices for so-called pure gold before disappearing and becoming uncontactable,” Pang said.
He said when the FGJAM first detected gold adulterated with rhenium, the early samples contained up to 30% of the alloy.
Pang said the proportion had since been reduced to between 3% and 5%, making the fraud less obvious while still allowing the perpetrators to profit.
He said a goldsmith who unknowingly purchases 100g of such adulterated gold could suffer losses between RM1,800 and RM3,000 based on the current price of gold.
“The adulterated gold detected so far originated from overseas. The purity is deliberately compromised by adding rhenium dust when the gold is melted down. This process leaves the gold in a state that makes detection of its purity with conventional testing equipment at retail outlets almost impossible.
“It is only when the adulterated gold is melted down, and the alloys are separated, that it is found to have lower purity.”
Pang added that alloys typically used to enhance the hardness of gold are often silver and copper due to ease of separating them from the precious metal.
Pang said following the FGJAM’s alert on the matter, the Domestic Trade and Cost of Living Ministry (KPDN) is working with the industry to strengthen enforcement efforts and prevent consumers from being deceived.
However, he stressed that the public should not be unduly alarmed.
He advised consumers to be cautious about making gold purchases on social media platforms as they lacked an established business background in the gold industry and often operated without permanent premises, making it difficult for buyers to seek recourse if problems arose.
“Unusually low gold prices should be treated as a red flag.”
He also assured consumers that FGJAM’s members get their gold from highly reputable wholesalers and there should be no undue concern about adulterated gold.
Meanwhile, Malaysian Indian Goldsmith and Jewellers Association (MIGJA) president Datuk Abdul Rasul Abdul Razak said members were aware of the scam and had stepped up vigilance when purchasing gold.
He said apart from gold adulterated with rhenium and tungsten, he had also encountered cases involving jewellery made with a cheaper metal core coated in a layer of gold before being sold as high-purity gold.
Recalling a case at his jewellery shop in Kuala Lumpur, Abdul Rasul said a customer had attempted to sell several gold items that appeared genuine.
“Upon inspection, we found the core of the jewellery was made of silver and wrapped with a thin layer of gold.
“Even the customer was unaware of it because the items were purchased several years ago,” he said.
Abdul Rasul added that none of MIGJA’s members had fallen victim to the latest attempts by the syndicates and cautioned consumers to steer clear of unknown groups offering to sell gold.
Source: goldsmiths-warn-of-fools-gold
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