A high-tech scam unfolded in Hong Kong, after at least 200 ounces of fake gold was discovered by a group of jewelers.
The counterfeit gold was reported to have a street value of about $280,000, according to the Financial Times. While the discovered amount is small, some analysts believe it may be just the tip of the iceberg of a much larger counterfeit metals operation.
Haywood Cheung, president of the Chinese Gold & Silver Exchange Society, said that 10 times that amount might have seeped through the retail gold market.
Evan Luk Foon Group, the biggest jewelry group in Hong Kong, purchased the faulty batch in August for $11,500. After discovering the scam it put other stores on alert.
“This was the biggest hit yet,” said Paul Law, executive director of the firm, according to the Financial Times.
The fake gold used a pure gold coating to mask an alloy with similar properties to real gold. The metal included 51 percent of the bullion, mixed with seven other metals.
To produce such fakes it is believed that an expert must have been involved, who had a high level of knowledge about metallurgical engineering.
Bloomberg reports that the complex operation caused the jewelry company involved to lose HK$40,000 (US$5,150).
The counterfeiting of gold comes at a time when gold prices are soaring, while the demand for the metal is booming in China.
At a press conference in Shanghai by the Chinese Gold Exchange, it was revealed that the consumption of the bullion increased 500 percent since 2009. Over 209 tons of gold have been imported this year up to October.
The counterfeit gold was reported to have a street value of about $280,000, according to the Financial Times. While the discovered amount is small, some analysts believe it may be just the tip of the iceberg of a much larger counterfeit metals operation.
Haywood Cheung, president of the Chinese Gold & Silver Exchange Society, said that 10 times that amount might have seeped through the retail gold market.
Evan Luk Foon Group, the biggest jewelry group in Hong Kong, purchased the faulty batch in August for $11,500. After discovering the scam it put other stores on alert.
“This was the biggest hit yet,” said Paul Law, executive director of the firm, according to the Financial Times.
The fake gold used a pure gold coating to mask an alloy with similar properties to real gold. The metal included 51 percent of the bullion, mixed with seven other metals.
To produce such fakes it is believed that an expert must have been involved, who had a high level of knowledge about metallurgical engineering.
Bloomberg reports that the complex operation caused the jewelry company involved to lose HK$40,000 (US$5,150).
The counterfeiting of gold comes at a time when gold prices are soaring, while the demand for the metal is booming in China.
At a press conference in Shanghai by the Chinese Gold Exchange, it was revealed that the consumption of the bullion increased 500 percent since 2009. Over 209 tons of gold have been imported this year up to October.
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