Shanghai Gold Exchange denies diluted gold sales to China

Shanghai Gold Exchange, on Wednesday, denied a report on Perth Mint selling diluted gold from Australia, saying the report "is contrary to the truth" and "constitutes a defamation of the reputation of the SGE."

On the same day, Perth Mint, an Australia-based mined gold producer, released a statement on its website that said there was no question about the value and purity of its gold bars sold to customers in China, and that the one-kilogram bars it produced and sold contained at least 99.99 percent of gold.

The company said its one-kilogram 99.99 percent gold bars contain up to 0.01 percent of non-gold materials, including silver and copper, whose purity specifications meet industry standards and align with those set by the London Bullion Market Association.

An earlier report by the Australian Broadcasting Corp (ABC) alleged Perth Mint selling diluted bullion to China. The report said while the gold remained above the 99.99 percent requirement, it exceeded the amount of allowable silver in Shanghai.

However, a statement posted on SGE's website in 2005 noted that for imported gold bars, only the gold purity is required while the quantity and purity of other elements in the gold bars are not mandatory because different countries have different standards. Therefore, the SGE can only make requirements on the gold contained in the bars but cannot make requirements on other elements.

The statement said that the imported gold bars delivered by the exchange are standard gold produced by qualified suppliers and refineries recognized by the London Bullion Market Association.