Gold scams rising in China as middle-class investors seek safe-haven assets amid weak stock market, property crisis
- Gold purchases have soared in China in recent years, with investors seeking safe-haven assets amid the weak stock market and ongoing property crisis
- But a number of gold-related scams have been reported, including products containing silver and rhenium
China’s weak stock market and ongoing property crisis, which have wiped out the wealth of the key middle class, has coincided with a growing number of gold-related scams amid strong interest in the precious metal as an alternative investment.
Gold purchases have soared in China in recent years amid the overall economic slowdown, along with low interest rates offered by wealth-management products and limited access to overseas investments.
“Gold is definitely already expensive, but it may probably continue to rise or at least retain its value, whereas we’ve lost money dramatically on our houses and stocks and most of our financial products, which may probably continue to decline in price.” Guangzhou-based saleswoman Wendy Liu told a customer last week.
Earlier this month, a Beijing-based franchise of a well-known gold brand was sued for fraud in a scheme that had allegedly cheated more than 70 investors out of over 60kg (132 pounds) of gold, the National Business Daily reported late last month. The case is ongoing.
Some victims claimed they had invested in gold bars priced at about 350 yuan per gram from 2016, with the store promising to buy back their purchases in the future.