GOLD ADULTERATION -

A NEW RISK TO GOLD JEWELLERY INDUSTRY

The rising gold price and competition among the jewellers i.e. Price war, has pumped a lot of malpractices in the gold jewellery industry. Earlier, g old ornaments were made using Gold, silver and copper, normally standard mi x of gold purity arrives as 91.6% of gold and 8.4% of either copper or silve r or combination of both. Due to the sharp price increase of yellow metal, now large jewellery manufacturing houses have started to mix other metals especially from the platinum family viz. iridium, palladium, ruthenium, osmium, the main advantage of mixing these metals are due to their characteristics . Normal melting point of gold is 1064 degree Celsius, where as the melting poi nt of iridium, palladium, ruthenium and osmium are 2410, 1554, 2250, 3045 degr ees respectively, which means if mixed with the gold and expose to a tempera ture close to 1064degrees, gold will get melted whereas the platinum family meta ls will be still, in the solid form and will stay in the same form inside the melted bar. Price wise platinum family metals are cheaper compare to gold a nd the density is also somewhat par with gold. Another interesting thing a bout these mix is that even carat analyser will be a failure to detect the presence of platinum family metals in the gold. Carat analyser will give the purity of only outer surface i.e. about 0.75 micron depth, beyond that ana lyser rays will be hard to penetrate. Moreover carat analyser requires cali bration with all sample metals, but majority of the jewelleries have calib rated their carat analyser only main metals viz. platinum, gold, silver and copper, hence the presence of platinum family metals will not be traceable t hrough carat analyser. Bureaus of Indian Standard (BIS) has issued notification to all hall marking centres situated in different parts of the country about the calibration of carat analyser with all metals used in the gold indust ry, but the status of implementation is still in dark. Below mentioned table will give an insight on the scientific and economic ch aracteristics of these metals Sl.No. Characteristics Osmium Gold Silver 1 Density (g/cm3) 8.96 2 Melting Point o 961 1083 3 Price in $/troy As on 20.03.2012 3.88 Platinum Copper 21.45 12.02 Celsius 1772 ounce 1674 699 Palladium 22.65 1554 1085 12.2 2410 125 Iridium Ruthenium 22.4 2250 1040 19.69 3045 1665 10.51 1064 32.63

From the above table it is evident that gold adulteration is possible without compromising any other economic values i.e., price margin

How Gold Adulteration affects the customers ? Normally public invest in gold in the form of bullions or ornaments, in c ase of ornaments standard purity should be 916 or 22CT, which means if a customer has purchased 10gms of 22CT item then it should contain 91.6% i.e . 9.16 gms of gold and 8.4% which is 0.84 gms of copper or silver or c ombination of both. But in the adulterated gold inside the ornaments presenc e of low cost platinum family members will be there in solid form itself whic h inter alia will reduce the actual content of gold, in other words, in adul terated 22CT gold, presence of gold will be only 86% to 88% and 14% to 12% will be iridium, palladium, ruthenium, silver and copper.

Normally children have the habit of chewing the locket in chains or chains its elf, as gold will not harm the body, but the platinum family members may inv ite a few disorders in the form of allergy, radiation effect in the body on o ral consumption. How to detect Gold Adulteration ? It can be detected only by assaying i.e., refining of gold using aqua reg ia mixture of Hydrochloric acid and nitric acid made up of a ratio of 1:3 parts Nitric Acid and Hydrochloric Acid. Calibrating the carat analyser with metals used for adulteration viz. iridium, palladium, ruthenium and osmium als o will help to detect the presence of impurities to a certain extent.

Published on 20th March, 2012 ghu.G DGM Internal Audit

Ra

Manappuram Gold Manappuram Finance Ltd