China National Gold Group Gold Jewellery Co, a subsidiary of the country's largest gold producer China National Gold Group Corp, announced Saturday that all their products meet with national standards, in response to allegations that some gold they sold had rusted.
The announcement came after domestic media reported Saturday that a Beijing resident surnamed Shen paid 14,900 yuan ($2,397) for 50 grams (1.76 ounces) of gold from the company's store in the Daxing district of Beijing on October 27, 2010, but found the gold got rusty after storing it in the bank for two years.
Some gold products rust because of excess metal impurities such as copper oxide black, as many Chinese gold producers either lack mature technology for extracting gold that reaches a 99.99-percent-pure standard, or don't control the process strictly enough, Wang Ruilei, chief analyst from Boyin Precious Metal Investment, told the Global Times Sunday.
In March 2012, the Tianjin Administration for Industry and Commerce revealed that three jewelry samples from the local market had insufficient gold content.
Gold Jewellery's announcement confirmed that in December they had negotiated with Shen and pledged to buy back the rusty gold at the current gold price if it was proven to be substandard.
But the customer refused to have the product checked by the country's jewelry testing center and has been causing trouble at the company's stores since then in hopes of winning compensation of 500,000 yuan, said the announcement.
Shen wanted Gold Jewellery to explain why the gold got rusty and intended to have the gold tested by overseas agencies, saying he does not believe in domestic testing, the Beijing Times reported Saturday. Neither Gold Jewellery nor Shen could be reached by press time.
China's testing centers for jewelry quality have fairly high technology and can be trusted, said Wang, expecting the situation will soon be clarified when Shen's third-party test results come in.
As the domestic leader as well as the only State-run gold producer, Gold Jewellery is expected to go beyond mere repurchasing and shoulder responsibility by revealing the truth, said Wang, "otherwise this case will continue diminishing domestic consumers' confidence in gold investment and further deepen the gloom of the gold trading market."
"I had planned to buy some gold for my wife, but this case changed my mind. If they're saying the State-run gold producer sold fake gold, who else can we trust?" a Guangdong resident, surnamed Ma, told the Global Times Sunday.
Chengdu-based Boyin Precious Metal Investment predicted that in 2013 the Chinese gold trading market is unlikely to see robust demand and some investors may even decrease their holdings of gold, due to oversupply of gold products since early 2012.
Feedback
RSS
