Editor’s Note
This article examines the volatile gold market of early 2025, exploring the surge in public investment and the financial services that fueled a modern “gold rush” in China.
In 2025, the price of gold, which had been rising sharply, plummeted dramatically at the end of January. As the market continued its upward trend, gold became an attractive investment target. In China, banks such as the Industrial and Commercial Bank of China and the Postal Savings Bank of China began offering gold buying services. People looking to “make a quick buck” took notice, leading to the emergence of various businesses and trends aimed at acquiring gold. This article aims to introduce the “alchemy” practiced by Chinese people as reported over the past year.
As news of the rising gold price spread widely, a noticeable increase in people selling gold accessories like necklaces and bracelets emerged. Many had purchased these items for weddings (there is a custom in China of giving gold as a wedding gift) but had since stored them away in drawers, unused. Fashion trends in China change yearly, so even if worn, the pieces can seem outdated. Many prefer to sell them to buy the latest smartphone.
On the other hand, because buying new gold jewelry is expensive, some people think, “It’s more meaningful and will make family members happier to melt down unused gold items from parents or grandparents, reshape them, and reuse them,” turning them into accessories with their preferred designs. Numerous businesses in China cater to this demand, charging only a few hundred yuan (thousands to tens of thousands of yen) for processing fees, which some find relatively affordable.
As more people wish to sell, it’s only natural for scam operators to emerge. Existing second-hand dealers began handling precious metals, and information about businesses advertising “high-price buyback” on the social media platform Xiaohongshu (RED) became more visible. However, many of these businesses offer prices significantly lower than the international gold market and use various excuses to buy at an even cheaper rate.
For example, here is the experience of Mr. Lin (pseudonym) from Changsha. He contacted a business via Xiaohongshu. Shortly after, two middle-aged men arrived at his home with a scale and a blowtorch in their car. The ring weighed 5.62g, but after they melted it on the spot and weighed it again, the weight had reduced to 5.02g. Typically, the weight loss from melting gold averages 1-3%, so this was much less than expected. The operators explained, “There are many impurities, so further refining is needed,” and reluctantly bought the melted gold for 4,530 yuan (about 100,000 yen), after deducting a 20% fee.
Meanwhile, customers like Mr. Lin are considered “easy targets” by other recycling businesses, who say that scammers even prepare scales that can be tampered with to alter readings. Scams commonly seen in China before the widespread use of smartphones and social media are still alive and well, albeit in transformed guises.