RIYADH, 3 October 2007 -- Jewelers in Riyadh have denied claims that fake gold is being sold in the Kingdom. The denials follow rumors that some foreign visitors who bought gold jewelry in the Kingdom have found them fake after returning home.

The demand for gold in the Kingdom increased significantly in the second quarter of this year -- by 30 percent compared to last year. The increase, according to the regional bureau of the International Gold Council in the Middle East, is due to Saudi Arabia's decision to decrease customs on imported gold from 12 percent to five percent.

Claims that jewelers are selling fake gold is damaging to an industry that heavily relies on integrity.

Muhammad, a salesman working at the gold market in Riyadh, said, "We have never heard of this. News like this cannot be ignored, as it would jeopardize our business and our reputation."

He added that he has been working in the gold industry for long years and that he has come across many men and women trying to sell fake gold. "Some stores may fall for that and end up buying and then selling fake gold without knowing it, as the weight of metal-painted gold may deceive them," he said.

He added that if his store was to sell someone fake gold accidentally then they would fully refund the customer. "After all, the merchant has to have a reputation of gold," he said.

Ali, a salesman at another gold shop, said, "We are monitored closely by the Ministry of Commerce and are checked randomly every once in a while. Customers are handed a receipt, which is a type of guarantee that states the fineness and the carats as well as the stones."

He added, "On the other hand, gold items are manufactured in our own factories most of the time, therefore pulling such a stunt means we would be out of business. We would ultimately lose face in the market."

Local storeowners said people often get cheated and pay huge amounts of money for fake items.

At the market, a woman carrying a branded watch, which she claimed was original, approached this journalist in front of a cash machine. The woman said she needed to sell the watch because she needs money for an operation.

The Ministry of Commerce confirmed that the Kingdom's system in regulating precious metals and gems requires that all imported gold should be stamped with the name of the country of origin and whether the item is 18 or 21 carats.

"The ministry also conducts random checkups on gold shops and factories, as 90 percent of gold items are manufactured locally. Samples are sent to laboratories to ensure that exact standards are maintained," said Fahd Al-Huthaili, assistant general director at the General Department for Combating Commercial Fraud in the Ministry of Commerce.

"There were no complaints of gold fraud, not to my knowledge. If there was then the ministry would take action," he added.

© Arab News 2007