A major financial scandal has erupted in Shenzhen's Shuibei gold market, where a prominent gold material supplier has vanished overnight, potentially involving losses exceeding 10 million yuan and leaving hundreds of merchants empty-handed.

**Gold Supplier Disappears with Massive Losses**

Recent investigations reveal that a major gold material supplier in Shenzhen's Shuibei market has suddenly ceased operations, with the owner disappearing and causing substantial losses to numerous upstream and downstream merchants. The total amount involved in the case may exceed 10 million yuan.

The problematic business, identified as "Yuebaoxin," had long served as a gold material supplier to numerous downstream merchants. The common trading practice in the industry involves "advance deposit payment followed by goods collection." However, multiple merchants discovered the store had ceased operations after making their deposits.

Industry sources indicate that Yuebaoxin operated as an intermediary in gold material trading, having been established in the Shuibei market for two to three years as a relatively large-scale supplier where many gold processing merchants sourced their materials. Beyond supplying downstream small merchants, Yuebaoxin also purchased gold materials from upstream suppliers.

Multiple suppliers confirm that upstream suppliers bear the greatest losses in this incident. While downstream merchants typically pay only partial deposits, upstream suppliers often face complete payment defaults for entire shipments.

Many merchants consigned hundreds of grams of gold materials to Yuebaoxin but have yet to receive settlement payments, with individual losses ranging from tens of thousands to millions of yuan.

**Major Gold Store Loses One Kilogram of Gold**

The incident's impact extends beyond local Shenzhen merchants, affecting gold stores, suppliers, and gold recycling businesses from other regions.

According to reports, a gold store in Pang Donglai's Angel City in Xuchang entrusted Yuebaoxin with gold purification services, ultimately losing 900,000 yuan worth of gold weighing over one kilogram.

Sources indicate that Yuebaoxin ceased operations around September 13, with the owner currently missing and numerous merchants facing complete losses of money and goods.

Current photographs show Yuebaoxin's storefront sealed with official notices. The premises have been cleared of most items, with a police station notice posted stating: "Effective immediately, Yuebaoxin has suspended operations. Anyone who has suffered economic losses due to business dealings with Yuebaoxin should register at the police station."

Corporate records show Yuebaoxin's full name as Shenzhen Yuebaoxin Precious Metals Co., Ltd., established in August 2023 with registered capital of 1 million yuan. The legal representative and actual controller is Tan Guang, with main business activities including jewelry sales, wholesale, recycling, and processing.

In May 2025, Yuebaoxin underwent personnel and location changes, with original controller Dai Wei withdrawing and Tan Guang investing 1 million yuan to acquire 100% ownership. The company also relocated from its original address at Room 601G, 6th Floor, Xinglong Gold and Jewelry Building, 71 Beili North Road, Shuibei Community, to Room 3061, Zhongzheng Huating, 2001 Bao'an South Road.

Local police have confirmed case registration, and a rights protection group for Yuebaoxin has grown to over 300 members, with numbers continuing to increase. Group communications show most merchant losses exceed 10,000 yuan. Following the September 13 announcement, numerous victims registered with police, and authorities have formally opened an investigation.

**Gold Price Surge Causes Massive Short-Selling Losses**

As China's largest gold and jewelry wholesale market, Shenzhen's Shuibei concentrates dozens of jewelry cities and over 10,000 gold jewelry stalls within just two square kilometers. It controls 70% of the nation's jewelry processing industry, generating annual revenue of 120 billion yuan, exceeding 99% of county-level GDP. This largest gold and jewelry trading hub serves as a barometer for China's gold market.

Around 2023, Shuibei popularized the "bypass intermediaries, wholesale prices for single items" sales model, with gold prices calculated as "market gold price plus processing fees," making products over 100 yuan cheaper than branded gold. Under soaring gold prices, Shuibei market became the beneficiary of this "overwhelming prosperity."

This year, gold prices have continued rising, creating unprecedented market enthusiasm, with Shuibei gold prices reaching 835 yuan per gram. Persistent price increases have caused massive losses for speculative short sellers.

Industry sources explain the short-selling strategy: "Suppose a supplier accepts orders at 780 yuan per gram, then delays gold delivery according to industry practice, betting prices will drop to 760 yuan per gram for profit. However, prices continued rising to 830 yuan per gram instead. To fulfill customer orders, suppliers must purchase materials at high prices and deliver at original prices, causing 50 yuan loss per gram, or 50,000 yuan loss for 1,000 grams."

"This advance booking model allows suppliers to control large gold quantities with minimal capital, but involves both high returns and risks. Once entering a one-sided market trend, suppliers may face cash flow crises, potentially causing even large companies to collapse," the source explained.

Beyond basic trading, Shuibei market features various complex gold trading strategies. Some customers purchase gold for storage with suppliers, receiving 3,000-7,000 yuan monthly interest per kilogram. Other profitable methods include processing old materials, lending materials for interest, and price arbitrage on sheet materials.

Market participants note that processing and selling gold represents small-scale business in Shuibei, while real profits come from speculating on gold prices and futures trading. Some suppliers have suffered severe futures trading losses, leading to cash flow breaks and inevitable closure when unable to fulfill downstream contracts.

Following Yuebaoxin's closure, social media rumors suggested a wave of supplier failures in Shuibei market, with a circulated list showing multiple suppliers had fled. However, investigations confirm this list is inaccurate, with most listed stores continuing normal operations.