Something HUGE Is Happening in China! Panic Gold Buying as $10 Trillion in Family Wealth Vanishes!

China Observer
821 位粉絲
Do you know what these people are doing? It's hard to believe, but people in China are scrambling just to get an appointment to buy gold. That's right. In mainland China, you sometimes can't even buy gold on the spot. You have to make a reservation first, and people are lining up just to get those reservation slots.
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Do you know what these people are doing?
It's hard to believe, but people in China are scrambling
just to get an appointment to buy gold.
That's right, in mainland China, you sometimes can't
even buy gold on the spot.
You have to make a reservation first, and people are lining up just
to get those reservation slots.
Gold prices surged last year, and jewellery stores across China were
packed with customers buying as though money were no object.
Then prices plunged, leaving many buyers
stunned. But people have shaken off that shock
and are rushing to buy again. Haven't there been
repeated warnings about fake gold sold in China,
and hasn't consumer spending been falling sharply.
So why are people still rushing to buy gold? Here's what's going on.
I'm wearing pieces of gold weighing roughly 3.5 ounces,
0.9 ounces, a tenth of an ounce,
and two-tenths of an ounce. That's about 4.8 ounces altogether.
I'm not saying this to show
off. Just hear me out.
So 4.8 ounces times 900 yuan, it's worth 119,700 yuan. What does that
mean for me? When I'm struggling, it's emergency money.
When I'm old, it's my retirement fund.
When I'm broke, it's money to get by.
When things are going well, it's jewelry. And when I've gone
through everyone in my contacts,
and I'm too embarrassed to ask anyone for a loan, one ring
can get me through a tough time.
Even a tiny ring weighing about a tenth of an ounce makes me feel
secure. Why do I love buying gold jewelry?
Because I don't feel financially secure. I can wear it
every day, see it, touch it,
and it makes me feel good. What's wrong with that?
I started buying gold around 2020. What made me do it?
A wealthy woman worth more than 100
million yuan opened my eyes.
Once, we were having dinner in Guangzhou. She told me she stocked up
on a lot of gold 10 years earlier,
when it cost just over 200 yuan per gram. She bought small
coins weighing about a third of an ounce each.
She said they're very handy for trading for
necessities if war or civil unrest breaks out.
Wealthy people always prepare for trouble,
she told me. When they have money,
they take steps to protect it and help it grow.
She said gold is one of the safest ways to do that.
Unlike real estate, which takes time to sell,
gold can be turned into cash almost any time.
But not everyone agrees.
A gold industry professional in mainland China recently urged caution.
He said in a video,
Don't rush. Please don't buy gold right now.
I've worked in the gold business in Shuibei for 10 years.
Lately, I've seen jewelry store owners from across the country
being extremely careful about buying inventory here.
Why? Because gold prices are falling so fast.
I've warned about the risks again and again.
I posted more than 10 videos last week alone.
And sure enough, after the National Day holiday,
prices started falling again.
I'm telling you firmly, now is not a good time to buy gold.
Some investors who already bought gold
are panicking. One commenter said,
I seriously think I've been set up by big investors.
I bought at 1,200 yuan and was
trapped at a loss. At $1,100, I was still trapped at a loss.
I figured if I bought at $1,000,
surely I couldn't lose again. I held off at $970 and $960.
Yesterday, I bought a little over $930
and I'm still losing money. Where is the bottom?
The speed at which Chinese consumers have been
buying gold in recent years has shocked even
seasoned market watchers. Last year alone,
individual buyers in China purchased about 476 US tons of gold,
up 28% from the previous year,
that accounted for a full third of all gold bars
and coins purchased worldwide.
In the first eight months of this year,
China's gold imports exceeded 1,100 US tons.
This isn't a sign that Chinese people
are especially wealthy, or that they're caught
up in speculation. Many feel they have nowhere safe
to put their money, so they're turning to
gold for protection. Meanwhile,
the Chinese Communist Party may also be quietly using gold
as a weapon against the US dollar.
In short, this buying spree is driven less by greed than fear.
For the past 20 years, buying a home in China
was almost the same as saving money.
Real estate made up nearly 70% of Chinese household wealth.
Families effectively put
almost everything they owned into property.
Now that wealth is vanishing fast, by the first
quarter of 2026, China's existing home prices had fallen about 22%
from the 2021 peak after
adjusting for inflation. In real terms,
prices had returned to mid-2016 levels, wiping out seven or
eight years of gains. New homes aren't doing much better.
As of June, prices for new homes in 70
major cities had fallen every month for more than two years.
How costly is the decline? Bloomberg
Economics calculated that every 5% drop
in home prices wipes out about 19 trillion yuan in Chinese
household wealth, equivalent to 2.7 trillion US dollars.
Why am I even paying this mortgage? I
bought my home for 3 million yuan in 2020.
I put 800,000 down and borrowed 2.2 million. With
renovations, I spent about 3.5 million yuan altogether.
It was a 20-year loan. I've been
paying for five years and have paid back 400,000 yuan.
Guess what the place is worth now? Only 2
million. If I keep it, I'll be working for the bank
for another 25 years. If I sell it, I still
won't have enough to pay off the mortgage.
I've wasted five years and I'll lose hundreds of
thousands of yuan on top of that.
How is this even home ownership? It's like buying something
that I have to spend my life supporting.
All my hard-earned money had gone into the developers
and banks' bottomless pockets. So many people are trapped.
I can't afford to sell, and I can't
afford to keep it. It's infuriating.
One commenter said that even Shanghai, where home prices had
held up better in most Chinese cities, had fallen this far.
Other cities must be even worse,
the commenter said, adding that they'd heard homes
in many places were now worth less than
one-tenth of their former prices.
I finally sold my apartment for a price I once thought
I'd never accept. It was a three-bedroom apartment
of about 1,130 square feet in the area around
Beijing. I bought it in 2018 for 1.2 million yuan
and spent another 30,000 yuan renovating it two
years ago. I plan to rent it out to cover some property management fees
and keep it for retirement
but I couldn't find a tenant.
I also haven't had much income these past few years so I listed it
for sale in May. The vlogger said she initially listed
the apartment a little above the going
market rates, even though she was already
a 60% discount from what she had paid. Almost nobody
came to see it. She kept lowering the price,
from 450,000 yuan to 250,000 yuan. More people came to
look, but nobody bought.
Last month, an agent brought an offer of 180,000 yuan. She thought
it was too low and turned it down.
On the last day of the October National Day holiday, an unfamiliar
a number from Tianjin Court
and asked whether she would accept 200,000 yuan. She replied that
her minimum was 210,000,
but the agent said there was no point bargaining. If she wouldn't sell,
the buyer could choose from plenty of other good apartments.
She checked recent sales of similar
units in her building and found that those prices were about the same.
She finally accepted the
situation. Then she had an idea.
She told the agent, see if you can get 205,000 yuan. If the
deal goes through. I'll give you another 1,000 yuan in commission.
Less than half an hour later,
the agent called back. The deal was done.
One commenter said it was sad to see the owner
happily bargaining for a few thousand yuan
while seeming to forget she already lost nearly a
million. The bigger issue is that when
a country's main source of household wealth keeps shrinking
month after month, families look for assets
that can't simply be produced in unlimited quantities.
That's where gold comes in.
The second fear, a stock market where insiders know everyone's cards.
With housing in trouble, what about stocks?
Chinese authorities constantly promote a booming
market and stories of investors getting rich,
but the reality is more complicated. Over the past
year, Beijing has stepped up its crackdown on insider trading
and market manipulation.
In the first half of 2026 alone, at least 21 controlling shareholders,
company chairs, and senior executives were investigated.
Regulators issued a record
Of 661 penalties last year,
recovering more than 15 billion yuan in fines and illegal profits,
even a former head of China's securities regulator was implicated.
That may sound like progress,
but the deeper problem isn't limited to the fraud Beijing is
targeting. The argument
is that the system itself creates opportunities for abuse.
China's stock market is closely tied to state policy.
The Communist Party uses public listings
to support favoured state-owned companies,
while keeping some of its largest and most
strategically important tech firms beyond the reach
of foreign auditors. The U.S. Congressional
Committee separately documented coordinated
pump-and-dump schemes run by networks linked
to the Chinese Communist Party to defraud American retail investors.
Those schemes exploit the same
information gaps and insider advantage
that ordinary Chinese savers confront at home.
One vlogger, frustrated after trading Chinese stocks, said,
I've worked so hard on these live streams,
saying positive things every day, and I still can't earn
enough to cover what I lose in one day.
I lost more than 50,000 yuan again today. I don't even
want to live stream anymore. I can't keep up with the losses.
This month, I've lost over 80,000 yuan
in funds and 440,000 yuan in stocks.
That's more than 500,000 yuan altogether. I don't want to do
anything now. I don't want to put on makeup or even wash my hair.
I'm just not in a good mood.
After China's stock market reached a historic high in 2021,
its total value fell sharply,
with an estimated US$6.5 trillion wiped out.
Several indicators fell to multi-decade lows
by mid-2026, when powerful players always seemed
to know how the game will unfold.
Why would someone without the Communist
Party connections want to take part?
And why do smaller investors so often end up losing everything?
More Chinese people are coming to recognise this pattern.
The third fear, wages that buy less every year.
China's economy has faced deflationary pressure
for almost 10 straight quarters.
It's longer such stretch since the country began moving toward
a market economy in the late 1970s.
Falling prices might sound like good news,
but deflation also means businesses earn less,
wages stagnate, and people become increasingly reluctant to spend.
The urban unemployment rate rose to 5.3% in August,
the highest since March. Among 16 to
24-year-olds who were not students,
unemployment reached 18.9% that month. That's nearly one in
young people looking for work.
One woman joked about how hard it was to find work. She said,
If you can't find a job, don't even bother worrying.
It's harder than finding a partner.
My husband recently lost his job,
so I started looking through job postings. Here's what I found.
Are you married? They don't want women
who might have children because of maternity leave.
Already have a child? They still don't want you.
You might have another baby,
or your first child might be too young.
Not married? They don't want you either. Without
family pressure, you might quit any time. Over 35?
Too old. Too young? No good. Too much experience?
Hard to manage. Too little experience?
Training takes too long and costs too much. Too educated?
No. Not educated enough? Also no. Finally,
I found a security guard job paying 2,500 yuan a month.
But you have to know how to use a computer
and make PowerPoint presentations. Why does a security
to guard need PowerPoint. Forget it all.
Nobody should go to work. We should all just stay in bed.
With wages stuck, housing prices collapsing,
and no reliable social safety nets, Chinese families
are too anxious to spend.
They're also increasingly afraid to trust financial assets on paper,
whether stocks, investment products,
or the numbers in a savings account.
The fourth fear, the outside world is closing its doors to Beijing.
Trading partners that once
welcomed Chinese exports
and investments are now pushing back against Chinese products.
The European Union goods trade deficit with China grew
from €306 billion in 2024 to €360 billion in 2025.
It's projected to reach €400 billion this year.
EU officials have formally described
the imbalance as a strategic challenge.
Brussels has also introduced new measures to prevent Chinese companies
from avoiding tariffs by shipping goods to third countries.
Foreign investment is also pulling back.
Foreign direct investment into China peaked at US$189 billion in 2022,
then fell to about US$105 billion in 2025, its lowest level since 2010.
In the first five months of 2026,
cumulative foreign direct investment dropped 8.6% from a year earlier,
with Western investors leading the retreat.
Fewer factories, fewer joint ventures,
and fewer foreign invested jobs mean fewer opportunities
for ordinary Chinese people and the businesses that might hire them.
For families, there are fewer ways to earn and invest money.
Now comes the crucial point.
While Chinese families are under pressure and rushing into gold shops,
Beijing is doing exactly the same thing, buying gold.
According to the World Gold Council,
China's central bank has increased its gold holdings
for at least 21 consecutive months.
Its reported reserves have reached about 2,586 US tons,
or about 8% of total reserves.
That's above the historical average of 5%.
percent. This goes beyond cautious diversification.
Some analysts believe Beijing is laying the
groundwork for a yuan-based financial system backed by gold,
with the aim of weakening the
US dollar's dominance in global finance.
A strategist at Hong Kong-based Gold Mountain
Asset Management puts it simply,
central banks and private investors are diversifying their
reserves and savings into assets without counterparty risk.
It's part of a long-term
strategy to protect both.
Beijing has also built gold-backed settlement arrangements for trade
with Russia and Iran, established the Shanghai Gold Exchange,
and developed a gold benchmark
for Asian trading hours.
One research firm describes this as a three-part strategy.
Manage the yuan's exchange rates,
buy large amounts of gold, and create a payment channel
that bypasses the US dollar entirely.
Some analysts go further. They speculate that Beijing
might one day disclose audited gold reserves far
larger than it currently reports, then use them
to launch an offshore yuan linked to gold
and freely traded internationally. That currency
could compete directly with the dollar as a gold reserve currency.
Meanwhile, the yuan used in
everyday life in China would remain tightly controlled.
For now though, the gap is enormous.
The yuan accounts for less than 3% of global payments through SWIFT,
compared with 51% for
the US dollar. Every additional ounce of gold
in China's central bank vaults is another building
block in a financial system designed
to be less dependent on Washington and more resistant to
sanctions. Consider the full picture.
Real estate, the foundation of household wealth, is disappearing.
The stock market has become, in this account,
a casino favouring political insiders and a source
of money for the powerful.
Wages have stagnated, and prices are slowly falling.
Meanwhile, countries
outside of China are closing doors
that Beijing spent decades opening, and the Communist Party,
whose policies the script holds responsible for these problems,
is now stockpiling an asset that
has outlasted countless currencies and eras.
In a sense, household and government institutions
are making the same bets.
Both are quietly expressing a firm lack of confidence in the
system built by the Chinese Communist Party.
Will that bet pay off? Perhaps,
but only if the Chinese Party itself is no longer in power.
