The soaring gold price does not equate to everyone along the supply chain making money," remarked Xiao Ming (a pseudonym), who works in the precious metals industry, sighing as he observed the volatile yet rising gold prices. On January 29th, the price of gold once again set a new record, with London spot gold reaching a peak near $5,600 per ounce. Rewinding just one year, the price had previously set a new high at $2,800 per ounce. From the night of the 29th into the 30th, gold prices retreated after hitting highs; as of the time of writing, London gold was hovering around $5,050 per ounce.

An intuitive assumption would be that the entire gold industry chain is profiting handsomely from this historic surge. External optimism is also reflected in the stock prices of precious metals-related companies, showing a situation where "stouts outperform gold." For instance, Sichuan Gold saw a sharp rise starting January 15th, closing with seven limit-up gains in ten trading days by January 29th, its share price skyrocketing from 31 yuan per share to 66.86 yuan per share, before hitting a down limit on the 30th. Hunan Gold started the year with five consecutive limit-up gains. China Gold, after four straight limit-ups, closed up 8.74% on January 30th.

However, the experience of some practitioners in the precious metals sector contrasts sharply with the heated market sentiment; Xiao Ming believes his industry is entering a severe winter. "The profitable era for our industry is already over, and it might gradually disappear altogether," Xiao Ming revealed, stating that amid the soaring prices, intermediaries like his company, who solely engage in gold processing, are almost "losing money on every deal." Recently, a leading company officially announced the delisting of investment gold bars. As of press time, it was discovered that some banks have temporarily removed investment gold bar products, while others have modified the application time for physical gold bars to 9:30 AM - 3:30 PM.

This temporary delisting of investment gold bar products is seen within the industry primarily as a cooling-off measure amidst the frenzied price surge, yet it has unexpectedly triggered a wave of "panic buying" and even concern. "The intention of precious metals companies isn't to say we're out of stock, but rather that prices are rising too fast and volatility is too high, leading to significant risks; we hope to temporarily cool things down. However, this message, when passed to consumers, can have the opposite effect, making them more determined to buy precisely because they're told not to. It can also create panic among those not very bullish on gold, making them wonder if the company is in trouble," Xiao Ming explained.

Since the hot gold market began last year, banks have also temporarily suspended investment gold bar products. A typical instance was when the "Announcement on Tax Policies Related to Gold" took effect in November 2025; interpretations of the new policy were unclear across the precious metals industry and banking sector, leading some banks and companies to cautiously choose temporary delisting or suspension of physical gold redemption. In early November 2025, a bank's customer service responded that the system for redeeming physical gold was being upgraded and was expected to be completed within the month, after which redemptions could proceed. Shortly after, the bank relisted its investment gold bar products and reopened the system for converting held gold into physical gold.

For some mid-tier precious metals companies, however, profits from investment gold bar-related businesses have been shrinking ever since. "Actually, this policy has no impact on members of the Shanghai Gold Exchange, but it significantly affects us. We only hold a trading qualification with the SGE, so we need to bear an additional 7%-13% tax. This essentially means a price increase for consumers, which banks certainly won't accept, forcing us to delist the gold bars," Xiao Ming stated.

Beyond investment gold bars, banks' physical precious metal products also include crafted precious metal items, gold and silver coins, medals, jewelry, and various other categories. Unlike investment gold bars, the pricing for these other categories often includes a relatively high premium added to the base gold price. From the consumer's perspective, this premium is seen as a craftsmanship fee. The better the craftsmanship, the higher the fee—a well-established consensus among those who have purchased gold jewelry.

For precious metals companies, however, these crafted items, which seem to offer a chance to profit from the craftsmanship fee, represent a business with even "murkier waters." Xiao Ming's company specializes in precious metal products, including the processing and sales of gold and silver crafts, bars, coins, and medals, primarily distributed through bank channels. "We previously listed a gold craft item with a bank, priced around 130,000 yuan. We wanted to increase the price, but the bank disagreed. Now, with gold prices rising so rapidly, the cost of raw materials alone might reach 130,000 yuan, not to mention the craftsmanship fee and other expenses. Now, we can only hope no one buys this product," Xiao Ming said.

In Xiao Ming's view, the industry he works in is gradually declining. "Our industry's perspective is that banks might eventually phase out their agency sales business for precious metals, replacing it with their own branded gold or branded gold bars. Precious metal crafts will also likely decline further because as gold becomes increasingly expensive, adding a high premium for craftsmanship—which doesn't necessarily guarantee quality—makes them less cost-effective, leading to fewer buyers."

"We are considered a mid-tier company in the precious metals industry, owning just one gold processing plant and some qualifications, with business access limited to banks. Large banks have their own stringent criteria for selecting suppliers; we haven't penetrated many of them and work more with some city and rural commercial banks," Xiao Ming explained. The business model for such companies appears straightforward: after establishing channel cooperation with a bank, they can list their products on the bank's precious metals shelf and also help banks customize branded gold products.

Precious metal products are generally not held as spot inventory; typically, after a bank receives a customer order, it transfers the order to the supplier, who manufactures and supplies the product to the bank, which then arranges delivery or notifies the customer for pickup. According to displays on several major banks' mobile apps, purchasing physical gold bars is primarily done through pre-sales, with delivery cycles ranging from as short as 2-4 working days to as long as 10-15 working days. A significant proportion of banks' physical precious metal products are supplied by these precious metals companies, yet the general public remains largely unaware of their existence. In fact, only some banks explicitly disclose the supplier in their product descriptions.

For example, China Merchants Bank's "CMB Gold" products include both self-operated and agency-sold items. Suppliers for agency-sold products include companies like Baitai, Shaanxi Gold, Shandong Gold, Shandong Zhaojin, China Gold, and over ten others. Taking the "CMB Gold Horse New Year Gold Bar" as an example, the bank's mobile app page clearly states that this product is not self-operated by CMB and that the supplier is Baitai Company.

"When buying gold bars from a bank, a fee is added to the real-time gold price based on the craftsmanship involved. For instance, cast gold might add about 9 yuan per gram to the real-time price, while investment gold bars add around 12 yuan per gram—this is the final price you pay. This fee of roughly 10 yuan needs to be shared with the bank; typically, the bank takes three to four yuan, and we take seven to eight yuan. The specifics are negotiated and agreed upon with the bank before the product is listed," Xiao Ming said.

Why don't these seemingly profitable precious metals companies actually make money? These companies primarily engage in processing gold products, requiring them to purchase gold ingots from the Shanghai Gold Exchange as raw materials. Unlike leading enterprises that can stockpile materials to hedge against price fluctuations, mid-tier and smaller companies are relatively "asset-light," more commonly operating on a model of purchasing materials only after receiving orders.

However, in the face of skyrocketing gold prices, the time lag between receiving an order and purchasing the materials creates a situation where costs can exceed the selling price. "Our company generally doesn't stockpile materials; we place orders on the SGE only after receiving customer orders. The SGE stops accepting locked-in prices after 3:30 PM, and the minimum purchase quantity is 1 kilogram. With prices rising so fast and the market so hot, we might still receive orders after 3:30 PM, and sometimes we have to accumulate orders if the weight isn't sufficient. These orders are settled at the gold price when the customer placed the order with the bank. By the next SGE trading session, the gold price might be far higher than the customer's order price. The profit we make needs to cover costs like craftsmanship fees, shipping, insurance, etc. If you add gold price volatility on top of that, it basically means we lose money on every deal," Xiao Ming explained.

"Banks essentially earn easy money from selling physical gold, but even if they get the 'meat,' we aren't guaranteed the 'broth'—sometimes we have to fight for the 'wash water'," Xiao Ming remarked, describing the current market dynamics.

Regardless of the industry's sentiment, gold's surge, far exceeding expectations, has attracted significant attention from investors. Mainstream gold investment channels currently include physical gold, gold ETFs, gold-related stocks, gold stock ETFs, paper gold (accumulation plans), gold futures, and more. A financial professional suggested that for short-term trading aiming to profit from price fluctuations, gold ETFs are a convenient tool, and bank products like paper gold or accumulation plans are also good options. For long-term holding, physical products like bank investment gold bars can be considered. Those seeking industry超额 returns might consider allocating to some gold stocks or gold stock ETFs.

Beneath the market's prosperity, risks are quietly accumulating and even materializing. Recent widespread attention has also focused on cases of gold merchants absconding, involving gold investment platforms, suppliers from areas like Shuibei, and others. The aforementioned financial professional emphasized that ordinary investors must use正规 channels like banks, stock exchanges, and licensed financial institutions. He cautioned against any models promising "high returns, zero risk," such as gold custody, pre-set price trading, or leveraged spot trading, as these often involve unregulated资金 pools and涉嫌 illegal financial activities, posing a high risk of total loss.

The practitioners' experience once again contrasts with the fervor of ordinary gold investors. Xiao Ming admitted that even if prices fall from current levels, gold is still very high. For companies or individuals in the precious metals industry, particularly those in the mid-to-lower tiers, rising gold prices反而 make it easier to incur losses. "Some platforms operate models where people deposit gold with them, and the platform offers high interest rates; such setups are highly vulnerable to bank runs. For ordinary people buying physical gold, using正规 channels like banks is much more reliable," he advised.

Late on the night of January 29th, spot gold prices suddenly plunged, marking a correction in the relentlessly climbing market. As of this writing, the price of London spot gold had retreated to around $5,000 per ounce. Can this correction offer precious metals companies some breathing room? "Not really noticeable, after all, our gold bars have already been delisted from the banks, and we have very little business now," Xiao Ming concluded.