The consumers of Saudi Arabia have been warned by the Gold investors that the gold bought online can be fake or of low quality. The gold that is being sold by unauthorized online stores is reported to have increased in number and has affected the economy. These fraud online gold retailers have caused a dent in the Saudi gold market. The investors also briefed that these online stores and consumers cannot be monitored through an official mechanism. The deputy chief of Goldsmith in Makkah, Abdul Ghani Al- Saiegh said that e-commerce is a modern tool of the trade. It is now being used for the trade of gold and jewels, globally. However, the kingdom is not equipped with the mechanism of proper gold trade via the internet.[irp]
Abdul Ghani Al-Saiegh who is also said that there is a need for strict controls and tight supervision to protect the consumers. He said that there are a lot many people who have started the online selling of gold without holding their official permits from the Ministry of Commerce and Investment. The interior ministry has instructed that there shall be supervision of the purity of gold (i.e. the gold measure karat shall be reported properly) and proper control of money transferred. Yet the instructions of Ministry are not fulfilled as neither the gold is being supervised nor the money transfers are being controlled. The online gold sellers are selling gold by violating the international standard. Saiegh briefed that the gold is traded according to weight and number of karats. Yet the online gold sellers are selling gold on basis of pieces of gold.
Al-Saiegh has thereby urged the ministry to intervene and regulate the sale of gold taking place on the Internet. Saiegh also said that the trading of gold through the Internet does not only put investors and consumers at a loss but also the whole of the economy is suffering from its hazards. The gold sold online can be used for various unethical purposes such as money laundering and illegal profit making. A huge number of authorized global brands of gold are now selling gold on the Internet. We are indeed in a need to have regulated and controlled online gold trading stores in the kingdom. The Ministry shall take up a step for it.
Kingdom of Saudi Arabia is also in the grips of the improper licensing process: Which has terribly hindered the investors to initiate online stores to sell gold and jewelry. Mohammed Jameel Azouz who is another member of the committee said that several local traders are selling gold online without a license. The gold is also being delivered to the destination by the private cars of gold sellers. It is the most insecure way to transport gold. The basic problem is that the transport companies are reluctant to transport the gold as its security would cost a lot.[irp]
Abdul Ghani Al-Mahana who is the chairman of the committee for gold and jewels of the Eastern Province Chamber of Commerce and Industry says that unauthorized online gold trade has risen in the kingdom. He warned the consumers to not buy gold online.
Source: Saudi Gazette