By Tan Ooi Boon, Invest Editor
SINGAPORE – It’s true enough that all that glitters is not gold, but it can be far harder to know just what you are buying when you do splash out on the precious yellow metal. We can judge on appearance and weight, but neither tells you how much gold there is until you use X-ray scanners or get a refinery to extract the precious metal.
The result can be rather disconcerting because most people won’t bother to check the authenticity of their jewellery until they need to sell it.
That was the distressing situation Madam Chen, a retiree in her 70s, found herself in when she traded about 20 pieces of her 916 gold jewellery that had been accumulated over many years.
While 916 refers to the purity of each piece – 91.6 per cent – they can also be known as 22K gold, which is the common standard for such jewellery sold in shops here.
Like many people, Madam Chen exchanged the items for cash at the Singapore Precious Metals Exchange (SGPMX). When SGPMX sent the pieces to Singapore Assay Office (SAO) for testing, Madam Chen’s gold pieces were found to have an average purity of 88 per cent, not the 91.6 per cent benchmark.
So her jewellery, which weighed about 140g in total, produced only about 124g of gold when it should have been over 128g. The 4g difference meant Madam Chen was short-changed over $300, based on the current gold price.
“I have to live with the fact that some of my gold pieces were not what they seemed. It is impossible to complain now because I don’t even remember where they were bought,” she says.
Her case is not an isolated one. In another test arranged by Invest, the result was almost similar – the SAO melted down 10 pieces of 916 gold jewellery and found them to have an average purity of 89 per cent.
The result does not mean that all pieces were sub-standard; it can mean that some items actually had 91.6 per cent while others were far off from benchmark, and these affected the overall purity of that particular stash.
SGPMX chief executive and founder Victor Foo notes that such results were common for many customers when they traded in their jewellery. This is why he uses a portable scanner to test every piece in the presence of his customers so that the “indicative result” allows them to know the quality of their jewellery.
“Very often, our tests show the jewellery’s hooks or adjoining points have little to no gold content,” he adds. “Some customers were shocked to find out that some of their gold ornaments turn out to be gold-plated only.”
When such pieces are detected, he usually advises customers to take back the ornaments as keepsakes rather than to melt them down, as this will not produce much gold.
What should buyers do
It is not a requirement for goldsmiths to authenticate or hallmark gold pieces, but 14 or so gold retailers with around 30 stores across the island engage the SAO to certify and put its hallmark on their jewellery.
Firms published on the SAO’s website include household names like Poh Heng, On Cheong, Chip Lee, Ming Seng, as well as Arthesdam, a popular destination for tourists in Little India.
The SAO says these jewellers send all their gold pieces to be scientifically certified through X-ray and random “fire assay” or smelting tests to ensure they meet the benchmark gold content – 99.99 per cent for pure gold pieces and at least 91.6 per cent for the more common 22K, or 916 jewellery.
The ones that meet the benchmarks are inscribed with a hallmark that comes with a SAO lion’s head emblem.
Of course, items that do not have such hallmarks can still meet the required gold content. But if you want assurance that you are getting your money’s worth, look for those with SAO hallmarks, because the tests are so rigorous that any pieces that miss out on even a fraction of the passing benchmark will be marked as “failed”.
SAO senior manager Yap Jian Jie’s tips on buying gold
There are items that are exempted from hallmarking, due to weight or thickness limitations, and you can request reports that certify their purity. The SAO also offers a screening service to verify consumers’ articles for a small fee.
It is common for parents to give gold jewellery at their children’s wedding, so it is essential that they do not buy jewellery that is “sub-standard”.
Senior Counsel Engelin Teh says: “I would suggest that parents purchasing gold jewellery should insist on a certificate of purchase certifying that the gold purity is 91.6 per cent. This is important to assure the buyers that they are getting what they pay for and as evidence in case of a legal suit.”
If the goldsmith cannot issue such a certificate, they can try to bargain the price since they do not get an assurance that there is no discrepancy in gold purity, she adds.
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