China Cracks Down on Illegal Gold Trading in Shenzhen

Shenzhen authorities issued a joint statement Friday warning against illicit financial practices within the city’s gold market, following reports of unregulated investment schemes and fraudulent activity. The statement, released by multiple agencies, targeted unauthorized applications offering leveraged gold trading, online broadcasts promoting bullion sales, and individuals falsely representing affiliations with the Shanghai Gold Exchange (SGE).

The crackdown comes amid increased volatility in precious metals markets, with gold prices recently reaching record highs driven by geopolitical uncertainty and expectations of shifting interest rate policies. According to reports, the Shenzhen gold market, particularly the Shuibei area, handles approximately 70 percent of the physical deliveries processed through the Shanghai Gold Exchange annually.

The joint statement specifically condemned practices that circumvent established financial regulations, including the provision of high-risk investment products to retail investors without proper disclosures. Authorities also warned against the misrepresentation of credentials, emphasizing that only authorized members of the SGE are permitted to conduct official business related to the exchange.

The Shanghai Gold Exchange, established in 2002 by the People’s Bank of China, is the country’s primary platform for trading gold, silver, and platinum. It launched an international board in 2014, expanding its reach beyond domestic markets. Recent activity at the SGE includes visits from international organizations like the Standard Chartered Bank and the SBMA, signaling ongoing efforts to strengthen international collaboration.

This move by Shenzhen authorities aligns with broader efforts to enhance cooperation between Hong Kong and Shanghai in the gold market. A recent agreement between the two cities aims to deepen cross-border connectivity in bullion trading, clearing, and storage, with officials describing the partnership as “the dawn of a new chapter” for global gold markets.

The SGE recently launched a Hong Kong Certified Vault in June 2025, further solidifying its presence in the region. The Shenzhen statement did not specify the number or severity of ongoing investigations, but indicated that enforcement actions are underway to address the identified violations.