Mainland gold rush continues amid scams

Chinese buyers are expected to continue their gold rush despite an increase in scams and soaring prices.

The precious metal yesterday hit a fresh record high above US$2,300 (HK$17,940) an ounce.

Gold has only been past US$2,300 an ounce twice before, in 1980 and from late 2011 to early 2012, as recent comments from US Federal Reserve officials cemented market expectations around US interest rate cuts. Silver also hit its highest since June 2021.

However, gold-related scams have been rising in China amid the recent rally.

A Beijing-based franchise of state-owned gold giant China National Gold Group Gold Jewellery was accused of providing illegal custodian services after it abruptly closed its store in December, leaving its customers unable to retrieve gold bars they bought and deposited at the store.

The amount of money involved is expected to be more than 43 million yuan (HK$46.5 million) based on current gold prices.

China National Gold Group said the franchised store violated agreements by offering illegal services. The group will provide advance payments to affected consumers, without specifying amounts.

There have been similar complaints in other provinces recently.

In a related development, Cuizhu district police in Shenzhen asked merchants in Shuibei, China's gold and jewelry trading hub, to enforce real-name registration for buying gold worth 20,000 yuan or more. Merchants are also required to check whether buyers' bank account details match their identity card information.