As gold prices surged to record highs, many Chinese investors believed the precious metal was a safe and lucrative bet. Julie Li was among them. About a year ago, the 28-year-old customer service agent from Sichuan Province invested roughly $35,000 in gold bars through Yongkun Gold, a company operating an online platform and numerous jewelry stores in eastern China. Encouraged by strong returns, she even borrowed an additional $20,000 on a credit card to increase her stake.
However, last month, Li and thousands of other investors were stunned when Yongkun Gold halted all withdrawals and abruptly closed its shops. The company’s headquarters in Hangzhou shut down, and communication ceased, leaving investors unable to access their savings.
“That’s all my savings,” Li said, recalling persistent assurances from salespeople that gold prices would continue to rise.
China’s retail investor enthusiasm has played a significant role in driving gold demand to unprecedented levels. In the first quarter of this year alone, Chinese buyers purchased approximately 124 metric tons of gold bars and coins—a 12 percent increase from the previous year and the highest volume globally, according to the World Gold Council.
Yet the collapse of Yongkun Gold has raised alarm among Chinese authorities, who fear potential social unrest stemming from financial losses. Police have launched a criminal investigation into the company’s operations.
Victims of financial scams in China are closely monitored, as many resort to public protests. Recently, dozens of Yongkun investors gathered with banners outside the Hangzhou city government. Police presence was heavy, resulting in at least one brief detention and the rest being escorted to an official petition office.
Following the protests, some investors reported receiving visits or phone calls from police warning them against further demonstrations, reflecting the government’s sensitivity to dissent linked to financial disputes.
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