Liquidating Gold & Silver -> China JWR platform Bankruptcy

The question we are trying to answer today is: Will Gold and Silver bounce back?

- A major Chinese gold trading platform called JWR has collapsed after a surge in retail investor activity tied to rising global gold prices.

- Tens of thousands of investors put money into JWR during a strong gold rally, but when prices kept climbing recently, many tried to cash out at once.

-The platform couldn’t handle the wave of redemption requests, leading to a liquidity crisis in which it is now unable to pay customers back, with estimated unpaid funds exceeding 10 billion yuan (about US $1.4 billion).

-Hundreds of investors protested outside JWR’s Shenzhen offices demanding their money, and police were involved to maintain order

Leverage trading for gold and silver will take away a good chunk of liquidity.

So I don't think we are expecting the amount of money coming back into the commodity market, especially if certain platforms are overleveraged

The question then becomes

Does this lead to the domino effect on other markets like Bitcoin, S&P 500, NASDAQ 100?

BTC dropped another 6% this weekend.

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Cheers,

Eric

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Eric Seto

Chartered Professional Accountant (CPA)

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Founder of 5MinInvesting.com

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