CHONGQING/SHENZHEN: Office executive Xu Tanji was contemplating buying a gold pendant for her mother’s birthday at a neighbourhood jewellery store near her house in Chongqing when she saw news reports about counterfeit gold.
State broadcaster China Central Television (CCTV) reported on April 26 that fraudsters had been mixing rhenium – a silvery rare metal that costs a fraction of the price of gold – with the precious metal to make fakes that are hard to detect.
Worried she might fall prey to the scam, Xu, 32, decided to take her mum shopping at a more reputable mall instead.
“It will be more expensive, but I feel more assured that I won’t be cheated,” said Xu, who works in the hotel industry.
Gold mixed with rhenium have emerged in the retail market as prices of gold – a safe haven asset – hit record prices amid growing global uncertainty. Previously, gold mixed with other cheaper substances such as copper and tungsten have also made headlines.
Rhenium is used to refine petroleum, among other industrial uses. On shopping platform Taobao, rhenium powder is sold at 170 yuan (S$32) per gram. Each gram of genuine gold can cost more than 1,000 yuan.
The authorities sounded the alarm on fake rhenium-gold as early as August last year, when the police in eastern Zhejiang province busted a crime ring that was adding rhenium powder to gold to cheat customers, including retailers, of up to 800,000 yuan (S$149,140).
Investigations revealed that the syndicate had received money transfers from various jewellery store owners from provinces all over the country.
Police had cracked down on the crime ring after a jewellery store owner bought a gold-rhenium necklace from a seller who said that the piece was made from older gold pieces.
The owner then bought the necklace at the price of 800 yuan per gram, as was the market price then, after checking that the necklace did not discolour under high heat.
The ruse was uncovered when a shop employee discovered that the necklace’s cross-section was coarse and not smooth like real gold. The owner then reported the case to the police.
The issue came to the fore again this year after CCTV reported on the rhenium-gold scam, as advertisements for rhenium powder had been popping up on online marketplaces. Some advertised that mixing up to 20 per cent of rhenium powder with gold could evade regular testing methods.
It is unclear how widespread the scam is or the damage incurred so far.
A person who works at a wholesaler in Shenzhen’s gold trading district of Shuibei said his company had encountered two instances of rhenium-laced gold in old jewellery.
This year, the firm tightened its internal procedures to guard against fakes by upgrading its testing machinery, subjecting the material it receives through more layers of tests, and thoroughly logging the details and origins of each piece it receives, he said. He declined to be named as he was not authorised to speak to the media.
The scam – and the ensuing need for more rigorous tests – increased the cost of doing business, especially for bigger brands with reputations to protect, he said.
“There are so many nodes in the supply chain… and if even a tiny bit of (rhenium) ends up in your product, there would be huge damage to your reputation.”
Gold experts told local media that the scam is difficult to detect because gold and rhenium are very close on the periodic table, which means that they have similar chemical and physical properties.
Their peaks in spectrometer tests – used to verify gold – overlap significantly as well.
Experts urged consumers to shop at reputable stores and to always ask for official invoices and quality inspection certificates when buying gold pieces to avoid falling prey to scams.
They also advised to opt for products priced by weight and not go for items that are sold at fixed price to reduce the chances of buying counterfeits, as customers may feel that they are getting a good deal on fixed price items and not think that they are being cheated.
Chen Zou, who was shopping at a well-known gold chain retailer in Chongqing, told ST that he avoids buying jewellery at neighbourhood shops because he is “afraid of being cheated”.
He said his purchases are recorded on the store’s app, which acts as a form of assurance if he chooses to resell the items in the future.
“Furthermore, these well-known shops have more to lose if it is known that they sell fakes,” added Chen, 43, who works in finance.
But some customers still choose to trust the small shops in the neighborhood they grew up with.
Lu Zhen, 52, said she trusts the owner of a jewellery shop near her home, because “we are old neighbours and have a good relationship”. The workmanship costs at luxury stores can also be “much more expensive”, compared with the one she frequents, she added.
She has not yet come across any instances of customers being cheated, although she is aware that gold scams exist.
Lu, who declined to reveal her occupation for privacy reasons, said: “I don’t have that many pieces, to be honest, and I buy them because I like their designs.
She added: “I don’t think I’ll sell them, so maybe I won’t know if the gold is fake.” - The Straits Times/ANN
