In an environment of soaring gold prices, many Chinese investors, like 28-year-old Julie Li, believed they were making wise financial decisions by investing in gold. With hopes of significant returns, Ms. Li put around $35,000 into gold bars through Yongkun Gold, a firm operating online and through several jewelry stores in eastern China. Encouraged by the company's promises of ever-rising prices, she even added an additional $20,000 on credit last year.
However, her optimism turned to despair when Yongkun Gold abruptly froze all withdrawals and closed its locations, leaving investors in the lurch. Li, who resides in Sichuan Province and works in customer service, expressed her devastation: “That’s all my savings... the salesperson kept assuring me that gold prices will keep rising.”
This latest incident appears to stem from a wave of enthusiasm from individual investors that helped propel gold prices to record highs, with over 124 metric tons of gold bars and coins purchased by Chinese investors in just the first quarter of the year—a 12 percent increase from the previous year, according to the World Gold Council.
The unfolding situation has caught the attention of Chinese authorities, who are wary of the potential social unrest that could emerge from substantial financial losses. Local police have now opened a criminal investigation into Yongkun Gold, signaling the government’s concern over safeguarding its citizens' investments and preventing broader economic instability.
However, her optimism turned to despair when Yongkun Gold abruptly froze all withdrawals and closed its locations, leaving investors in the lurch. Li, who resides in Sichuan Province and works in customer service, expressed her devastation: “That’s all my savings... the salesperson kept assuring me that gold prices will keep rising.”
This latest incident appears to stem from a wave of enthusiasm from individual investors that helped propel gold prices to record highs, with over 124 metric tons of gold bars and coins purchased by Chinese investors in just the first quarter of the year—a 12 percent increase from the previous year, according to the World Gold Council.
The unfolding situation has caught the attention of Chinese authorities, who are wary of the potential social unrest that could emerge from substantial financial losses. Local police have now opened a criminal investigation into Yongkun Gold, signaling the government’s concern over safeguarding its citizens' investments and preventing broader economic instability.
