Detectives from the Directorate of Criminal Investigations (DCI) raided a house in Riara on Monday evening and busted suspects smelting fake gold.
The detectives found gas cylinders, casts and burners which they believe was being used to lure unsuspecting gold buyers.
A source privy to the ongoing investigations on fake gold trade told Nairobi News that the location of the house was revealed by suspects already in detention.
"Those who are under custody informed detectives that there was another place where the fake gold was being smelted," he said.
Police are looking for the owner of the house who has only been identified as Abdul.
The raid comes after DCI boss George Kinoti said the fake gold scam is run by politicians, lawyers, judiciary officers and businessmen.
Last week, DCI officers raided a house in Kileleshwa where they found slabs of fake gold hidden in boxes. They arrested 15 people who are still under police custody assisting in the investigations.