Article for Tatura Guardian Newspaper

• Article for ‘Tatura Guardian’ newspaper.
• Deadline Friday noon.
• Proposed series of articles or opinion pieces laid out in letter format.
• Series: ’In My View’
• Author: Kevin Linton. Partner at consulting business ‘TopInfo’ based in the township of Tatura that deals with Information and Troubleshooting for those that require it.
• Article title: Is your Gold Jewellery as Valuable as You Think?.

Is Your Gold Jewellery As Valuable As You Think

The shiny polished lustre of gold is almost impossible to resist. Gold has been used as a store of wealth and used to adorn ears, fingers and necks of the human body for thousands of years. As a store of wealth it has been ‘passed down’ from generation to generation and has been used as a financial ‘standard’ for currency valuation and trade between sovereign nations for hundreds of years.

Pure gold is malleable and can be relatively easily hammered and moulded into decorations and ornaments. It has been treasured because of its rarity and its ability to maintain timeless beauty. In one case it has been estimated that if all the gold mined throughout history was concentrated in one place, it would only fill three Olympic swimming pools. It is almost enough reason to rush out and buy gold stocks on the open market, but beware, the price of gold like any commodity will rise and fall with time.

Because it was relatedly malleable, a person could sometimes imprint their teeth marks into the item to determine purity. However, this practice stopped as harder alloys were developed. Gold used in manufacturing and electronics is often used as an alloy in various percentages of purity. Usually 9 carat (375) or 18 carat (675) gold is favoured for rings and other jewellery as these concentrations are harder than the 24 carat (ct) which is 975 parts from 1000 parts pure and will readily wear. You can sometimes find jewellery imprinted with other numbers (eg. 465) as this jewellery was made with different alloy mixes and were more common in European countries. As a ‘rule of thumb’ the most common gold alloys are 9ct, 18ct and 24ct as these were of English assay origin.

Like most commodities, gold fluctuates in price depending whether the demand is high or not. In turn, demand can be determined on what is happening in the world at a particular time. If inflation is high, often gold is sought as a store of wealth and this will push up the price of gold. As there are more people wanting to buy gold in such a situation, you can say gold is in shorter supply. We have already mentioned there are only limited quantities in existence and it can only be extracted from deposits at relatedly slow rates, so this in turn contributes to its demand.

It is probably fair to say there are three main areas involving gold use and demand. These include; 1 Jewellery and ornamentation; 2 Government stockpiling to back currencies and trade and 3 Manufacturing and electronics. It is the jewellery and ornamentation trade (the oldest and most established use of gold) that I direct the following comments.

It has come to my notice that the current (10+ years) Australian jewellery industry and perhaps many other countries jewellery markets internationally are not what they seem. For some time now they seem to have been corrupted.

For some hundreds of years the public has been able to rely on Hallmarks and marks of purity to determine the quality of gold and therefore the price they should pay for an item. Although there has sometimes been an element of doubt in some quarters, Government and other Assay Offices have tested such items and provided government assurance that when purchased as an 18 ct item (for example), it is in fact 675 parts gold in 1000 parts of material. This was enforceable by law and if contravened, would result in long prison sentences and even the death penalty in the past.

It now seems that much of the jewellery that is not marked and even a considerable amount of that is marked, does not have the the gold specified. In other words, the assurance that a customer has in purchasing a certain percentage of gold, is not there. In fact, when it is wrongly marked, I would suggest it is corruption and theft. The motivation of course is greed, as cheaper nickel and copper have been substituted and the item inflated in price.

Unfortunately, there is no independent or private assay offices in Australia that will verify gold content. The Australian Government does not provide this service to my knowledge, although the Perth Mint does assay its own gold and specifies 99.9% purity.

It seems the system has been operated on trust for some time and has been ripe for corruption as gold prices rose. It now seems this has come to fruition and the jewellery business is rotten to the core. I have spoken to a number of Jewellers, engravers and others that work with such items and they have independently verified that many pieces they work with are not genuine. A tradesman gets to know his product, he would be considered incompetent if he did not and these people are saying the state of the Australian jewellery market is rotten.

I believe many people in the jewellery industry know the ‘state’ of the industry, but are fearful to ‘speak-out’ in case of retribution or a loss of income. I have heard of one organisation or association of Jewellers that have tried to ensure product integrity, but this organisation would seem to be working at a disadvantage to those that are prepared to price gouge to ensure greater profits. Unfortunately, gold buyers should probably not purchase gold unless it is independently assayed at a reparable laboratory. It is even possible that some governments may be involved in the conspiracy of silence as some economies and markets are still closely linked to gold and its price.

In my view some governments have been ignoring this issue for many years and have put the problem ‘in the too hard basket’ because assay work can be costly and needs to be spread over a number of products to be cost effective. However, I believe if people lose faith in gold as a wealth store, it could have implications for the Australian and many other countries economies.

In the mean-time, antique jewellery seems like a good bet.

Kevin Linton