High price of gold sees surge in scams

High price of gold sees surge in scams

The Commerce Ministry on Monday stepped in to boost confidence among gold buyers and the business community after a surge in complaints about fake gold as prices of the precious metal continued to rise.

Led by Deputy Commerce Minister Weerasak Wangsuphakijkosol, commerce officials and representatives from the Gem and Jewelry Institute of Thailand (GIT) inspected gold shops in Bangkok's Yaowarat area.

The visit came after a number of buyers lodged complaints that they were lured into buying fake gold. The scams were apparently triggered by a surge in the price of gold which reached its highest value in eight years at 27,000 baht per baht weight on July 17.

Mr Weerasak said yesterday that gold trading is a normal business for many who buy and sell gold bars and ornaments as assets. But now that scammers are trying to cash in on the rising gold prices buyers must take extra precautions, he said.

"Buyers should purchase from reliable vendors who have certificates from the GIT, also known as the 'Buy With Confidence' project. They must also look for the gold's hallmark," he said.

Jitti Tangsithpakdi, president of Gold Traders Association (GTA), said financial damage involving fake gold is estimated at two billion baht per year and the most affected are small-time pawnshops that lack standard equipment to verify the metal's authenticity.

He said the GTA will work closely with the vendors and pawnshop operators to educate them about how to spot fake gold.

"For those who trade online, it is important to verify before making purchases. And if the gold prices are too good to be true, we should assume we are dealing with scammers," he said.

According to Mr Jitti, gold trading is less frantic than two months ago when consumers flocked to sell their gold for profit. The prices of gold ornaments have risen by 20%, or about 6,000 baht per baht-weight, since January.

Duangkamol Jiambutr, director of the GIT, said they had received dozens of complaints, most involving gold bars which need special equipment to verify their authenticity.

However, she said that investing in gold remains low risk when compared with alternatives.

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