China has a 'fake gold' problem — locals are getting scammed into buying artificial jewelry

Gold's recent rally has sparked a bullion rush, but along with it came a surge in gold scams in China.

Thousands of people in China have been duped into forking out money on "fake gold" — inferior or artificial gold — after trying to purchase so-called "999 gold" online, according to the government.

The purest form of gold is commonly referred to as 999 gold, because it has gold content of 99.9%. It is also sometimes referred to as 24-carat gold.

"Fake gold is becoming a major problem in China as more Chinese are looking to put their savings into gold," said China Market Research Group's Managing Director Shaun Rein.

China is the leading consumer demand for bullion, after the country overtook India in 2023 to become the world's largest buyer of gold jewelry. 

Chinese consumers bought 603 tons of gold jewelry last year, a 10% jump from 2022, data from the World Gold Council showed.

"The demand for gold combined with unsophisticated Chinese consumers and investors unable to differentiate between 24-carat and lower quality gold has given rise to scammers," Rein added.

Reports about the rise in gold scams have been on local media and consumer protection sites such as Heimao Tousu, a third-party consumer service platform under tech giant Sina.

One user who reportedly bought five gold pendants for 1,985 Chinese yuan (about $280) on online e-commerce platform Taobao said he found out the gold was fake after conducting a flame test. Fake gold gets darker or reveals a greenish color when placed under flame, while pure gold turns brighter on exposure to heat.

Another user complained about buying a gold product from online retailer Pinduoduo, only for it to arrive with rust on it. The user claimed to have brought it to a jeweler for