Behind the 400 kilograms of gold "running away" oolong, the delayed delivery of gold is now a concern

The gold market is in turmoil again. On April 16, some netizens posted on public social platforms that some merchants in Shenzhen's Shuibei Gold Market "ran away" overnight with hundreds of catties of gold payments, involving an amount of up to 200 million yuan. Some Shuibei merchants told the Beijing Business Daily reporter that the relevant news did spread this morning, but the specific amount of payment involved is still uncertain.

As soon as the news was issued, it sparked heated discussions. A user at the scene told a reporter from Beijing Business Daily that the name of the store involved was Millions of Jewels, and it was not as empty as mentioned in some rumors, and at noon on April 16, there were still suspected employees in the store, and there was no crowd gathering in front of the door.

Subsequently, millions of jewels further refuted the rumors of "running away", and pointed out that the suspension of gold trading was mainly due to the freezing of funds, which triggered this rumor. This has once again triggered the market's discussion on the delayed delivery mode of gold trading, if the money and goods cannot be cleared immediately at the time of trading, what kind of risks will be generated?

The suspension of gold trading has triggered rumors of "running away".

"Shuibei gold ran away with a new record, 400 kilograms of more than 200 million, too explosive ......" On April 16, a news of a merchant in Shenzhen Shuibei market "running away" spread on the Internet. According to the content of the post, the "runaway" merchant pointed to a store called "Millions of Jewels", and mentioned "400 kilograms of gold raw materials, the amount of 200 million" and "real materials have not been obtained since Saturday".

Pictures circulated online show that on the evening of April 15, millions of jewelry stores were lit up, many people gathered in front of the door, and police appeared at the scene. Based on the content of the post, most of the on-site personnel are gold buyers who are chasing funds.

In the past two months, with the soaring international gold price, the gold market has remained hot. Under the words "running away" and "200 million", the aforementioned content quickly aroused heated discussions among netizens. "How did you take 400 kilograms of gold?", "Why did the owner of the gold shop take his own gold, why did he 'run away'", "The price of gold has risen so outrageously, the boss can't hold back"......

Regarding the rumors of the above-mentioned stores "running away", a reporter from Beijing Business Daily further contacted a number of Shuibei merchants to understand the situation. A merchant Zhou Liang (pseudonym) said: "I have heard relevant rumors earlier, I heard that he ran away with gold sheets, and the specific details such as the amount of payment involved have not yet been confirmed, but the scale of 200 million yuan is a bit exaggerated." ”

According to public information, Shenzhen Shuibei is the largest gold jewelry trading and distribution center in China, and millions of jewelry stores are located in Shuibei 2nd Road, Cuijin Community, Cuizhu Street, Luohu District, Shenzhen, mainly engaged in the wholesale and sales of gold jewelry, platinum jewelry, precious metal materials and other products.

Users at the scene told a reporter from Beijing Business Daily that at about 12 o'clock on April 16, the doors of millions of jewelry stores were closed and unlocked, and lights were on in the store and at the door. There were people who appeared to be employees sitting at the bar in the store, and users passing by looked in from time to time, but no one gathered.

And the rumors of millions of jewels "running away" soon ushered in a reversal. According to the "Luohu Release", millions of jewelry store staff said that the company is still operating normally and there is no "running away". The bank card used for the payment was frozen by the police on April 8, the specific reason is not clear, until April 13, the bank card has not been unsealed, the person in charge of the company suspended gold trading, and explained the reason to some customers, the suspension of business has been reported to the Luohu Supervision Bureau of the Shenzhen Municipal Administration for Market Regulation. The rumors of "running away" were also triggered by the suspension of gold trading.

Wang Peng, an associate researcher at the Beijing Academy of Social Sciences, pointed out that the recent surge in gold prices has made the gold market more sensitive, which may further trigger panic and greed among various market participants, thereby exacerbating the uncertainty and volatility of trading. In such a situation, rumors of "running away" can easily attract attention and have a negative impact on market confidence. Rumours do not necessarily represent the real situation, and investors should remain rational and wait for more information to be revealed.

Delayed delivery is risky

Although millions of jewels have been confirmed as oolong news, with the blessing of gold fever, it still brings endless talk to the market. Why did the owner of the gold shop "run away" when he took away his gold? A reporter from Beijing Business Daily also found the answer in an interview.

Zhou Liang pointed out that unlike the transaction method of retail merchants with money and goods, stores such as millions of jewelry belong to the upstream of the gold industry. Normally, such merchants purchase refined gold sheets that meet international trading standards through channels such as the Shanghai Gold Exchange, supply them to gold processing factories and make them into gold jewelry, and then sell them to downstream retail counter merchants, who earn the price difference.

"The price of gold sheet closely follows the trend of the international gold market, and the labor cost is very low, which is lower than the cost of gold bars and gold jewellery, so it will also attract some retail counter merchants or retail investors to buy, and then find their own processing channels to make gold jewellery. The demand for gold purchased by retail investors is small, and the sheet merchants are involved in rumors of 'running away', mostly because they collect funds from downstream merchants, but do not deliver gold as scheduled. Zhou Liang explained.

The sale of gold sheet to retail counter merchants has also buried hidden dangers. A reporter from Beijing Business Daily interviewed a number of gold-related merchants and learned that gold prices change in real time, and gold-related transactions are often delivered according to the current price. In order to earn more income from the price difference, some raw material suppliers will delay the delivery of gold after receiving payment from downstream merchants, and if the gold price rises rapidly, raw material suppliers need to bear the price difference loss. Once the loss is too large, some raw material suppliers will choose to "run away" directly.

Zhou Liang pointed out that the victims of such trading models are often their peers in the gold field, and it is not only the downstream counter merchants who cannot receive gold after paying for the goods. Before "running away", some raw material suppliers often borrow a large amount of goods or borrow funds from their surrounding counterparts in the name of "out of stock".

However, Zhou Liang also mentioned that due to the "runaway" incident in this type of model earlier, both retail counter merchants and retail investors are now more cautious in gold trading. Counter merchants can directly choose the processing factory to buy gold bars and gold jewellery, while retail investors can pay the money and deliver the goods in one hand, without carrying out any form of escrow services.

This kind of delayed delivery model also occurs between retail counter merchants and retail investors. In March 2024, the news that a number of franchise stores of China Gold and Shandong Gold closed their stores and "ran away" once appeared on the hot search, and users carried out custodian services for a long time after purchasing gold in the corresponding stores, thereby obtaining additional benefits such as reducing and waiving gold purchase fees and obtaining gold jewelry gifts. However, in the end, the relevant franchise stores went to the empty building, resulting in a large loss of funds for users.

And this rumor is not the first time Shenzhen Shuibei has encountered this kind of situation. Earlier, a Shuibei merchant posted that a man lost contact after borrowing jewelry goods from multiple merchants. On January 27, 2024, the Luohu Branch of the Shenzhen Municipal Public Security Bureau issued a circular, saying that the man involved in the case, Li, had been arrested a few days ago and a batch of stolen goods involved in the case had been returned.

In Wang Peng's view, the price of gold is affected by various factors such as global economic conditions and geopolitical risks, and the price may fluctuate greatly. If the sheet dealer makes a mistake in the judgment of gold price fluctuations, it may cause its own losses. At the same time, if the sheet dealer fails to deliver the gold on time or runs away with the money, the downstream merchant will face losses.

Pan Helin, a well-known economist, pointed out that the delay in the delivery of gold by the sheet metal producer has turned the physical gold transaction into a futures trading model of paying first and not taking the goods. For buyers, it can be seen as long in gold futures, and for sellers, it can be seen as short because a certain amount of physical gold will be delivered in the future. This kind of model is bound to look at the "face" of the price, and the sheet dealer is betting on the decline in gold prices, and there are significant market risks.

Rationally carry out commodity trading

In the past two months, as the price of gold has soared, the gold fever has remained high, after repeatedly refreshing the highest trading record in history, the gold price began to dive from around $2,350 / ounce on April 12, and rebounded slightly again on April 15. As of 18:30 on April 16, COMEX gold was at $2387.5 per ounce, up 0.20% during the day.

Changes in the international gold price have also led to changes in domestic jewellery prices and the gold market. On April 16, the price of gold jewellery of Chow Tai Fook and other brands was mostly above 734 yuan/gram, and the quotation of bank gold bars was also concentrated around 580 yuan/gram.

Talking about the follow-up gold price trend, Zhou Maohua, a macro researcher at the financial market department of Everbright Bank, pointed out that from the current complex international political and economic environment, gold prices have some support, but to break through the historical high, major unexpected events are needed. On the one hand, the continuation of international geopolitical conflicts and the new cycle of policies of major overseas central banks have given some support to gold, but it is worth noting that gold prices are currently at historical highs, and based on the inflation prospects in Europe and the United States, real interest rates may still pose a certain headwind to gold prices.

Zhou Maohua believes that from historical experience, long-term or ultra-long-term holding of gold has a certain anti-inflation effect, but it is necessary to pay attention to the recent increase in gold prices. At present, gold is at a historically high level, and there are still many uncertainties affecting the trend of gold, which requires high professionalism for investors. From the perspective of prudent investment, they are more inclined to choose a diversified investment portfolio, invest prudently, and pay attention to short-term market volatility risks.

As for the risk events in the gold trading field, Pan and Lin said that if users want to participate in gold investment, they can buy related fund products. If you choose to buy physical gold, you must get the physical one, and the model of prepaying first and not taking the gold has violated the original intention of offline gold investment and consumption, and it is easier to cause capital losses.

Wang Peng reminded that when conducting gold-related bulk transactions, whether it is a counter merchant or an individual user, it is necessary to choose a counterparty with a good reputation and reputation to reduce credit risk. Before signing a transaction contract, the terms of the transaction should be carefully evaluated, including price, delivery time, payment method, etc., to ensure that the terms of the contract are fair and reasonable. When trading gold, you should understand the relevant laws, regulations and policies to ensure the legality and compliance of the transaction. Among them, in the face of the value-added attributes of gold, individual users should remain rational, carefully assess risks and make wise investment decisions.

Beijing Business Daily reporter Liao Meng