As gold prices hit unprecedented heights, a significant wave of investment from Chinese citizens has unfolded, driven by promises of lucrative returns. One investor, Julie Li, found herself celebrating what she believed was a smart investment in precious metal. Over the past year, she poured nearly $55,000 into gold bars through Yongkun Gold, an online platform with multiple retail shops. However, much to her dismay, her financial dreams came crashing down when the company suddenly halted all withdrawals and closed its stores after failing to meet the anticipated payout.
In the first quarter of 2025, gold purchases in China surged significantly, with individuals acquiring around 124 metric tons—12% more than the previous year—making China the largest buyer of gold globally, according to data from the World Gold Council. This enthusiastic investment behavior contributed to soaring gold prices, but now these investors, including Ms. Li, find themselves at risk of losing their life savings.
The abrupt collapse of Yongkun Gold has prompted local authorities to launch a criminal investigation into the company, raising alarms for Chinese officials wary of potential social unrest stemming from widespread financial loss. "That’s all my savings," lamented Ms. Li, emphasizing the emotional toll of the company’s failure to uphold its promises. As countless investors are left in a state of uncertainty, reflections on the volatility of gold as an investment are becoming increasingly relevant in conversations surrounding financial security in China.
