Editor’s Note
Recent reports of abnormal operations among gold suppliers in Shenzhen highlight the risks of unregulated “gold investment” schemes. Investors are urged to exercise caution and verify the legitimacy of such opportunities through official channels.
In mid-September, market rumors circulated that over ten gold material suppliers in Shenzhen’s Shuibei area had experienced abnormal business operations, with some having already vacated their premises, drawing widespread attention.
On the evening of September 26, the Shenzhen Gold, Jewelry & Accessories Industry Association issued a statement via its official WeChat account. It stated that against the backdrop of high and volatile gold prices, some merchants, under the guise of physical gold trading, were illegally conducting “gold investment” businesses akin to futures trading. Such activities harbor significant risks including high-leverage gambling and capital chain ruptures, severely disrupting market order and damaging the overall image of “Shuibei.” Judicial authorities have already filed cases to investigate these illegal activities, and violators will be held accountable according to the law.
The association’s initiative called for upholding compliance, rejecting illegal operations, and consciously resisting any form of disguised futures trading or high-leverage gambling. It emphasized strict adherence to national laws, regulations, and industry standards, and the elimination of all virtual transactions and leveraged speculation detached from physical goods.
The initiative also urged strengthening risk awareness, conducting prudent due diligence on partners, and avoiding cooperation with entities of unclear strength or questionable business models. It advocated for honest operations, safeguarding the industry’s reputation, and strictly fulfilling anti-money laundering obligations by establishing robust internal control mechanisms.
As China’s largest gold jewelry processing industrial base, Shenzhen’s Shuibei area hosts a large number of private gold jewelry processing enterprises, generating an annual processing output value of hundreds of billions of yuan. Gold material suppliers primarily act as raw material providers, recycling old gold bars and jewelry from the public through agents, then processing them into standard gold plates/bars for sale to retailers.
Recently, with international gold prices showing strength again, the per-gram price of Shuibei jewelry once exceeded 850 yuan. Industry insiders indicated that the issues with suppliers like Yuebaoxin were not due to plate sales, but rather from engaging in gambling through a pre-set price model. This model allows merchants to control large amounts of gold with minimal capital, where clients pay a deposit to lock in large gold quantities and enjoy all profits from bullish or bearish bets.
Investigations in Shuibei revealed that long-existing trading models—such as private platform gambling and illegal over-the-counter circulation—carry significant risks. Bai Wenxi, Vice Chairman of the China Enterprise Capital Alliance, believes the essence of these incidents is the role distortion of gold material suppliers from “traders” to “market makers,” highlighting a lack of modern commodity market risk control mechanisms.
