Editor’s Note
Recent adjustments to gold buyback policies by major retailers like Caibai and China Gold reflect proactive risk management as gold prices experience significant volatility. By aligning buyback services with Shanghai Gold Exchange trading days, these measures aim to mitigate risks associated with price fluctuations during market closures. This move underscores the broader financial industry’s focus on stability in uncertain market conditions.
According to an announcement, starting February 7, China Gold Group Gold Jewelry Co., Ltd. suspended the handling of precious metal buyback services on Saturdays, Sundays, and statutory holidays—days when the Shanghai Gold Exchange is closed.
On February 6, Beijing Caishikou Department Store (hereinafter referred to as “Caibai”) officially began implementing new precious metal buyback rules. Both major gold companies have successively announced limits on the weight and amount of buybacks.
According to the “Global Gold Demand Trends Report” released by the World Gold Council at the end of January, Chinese investors purchased a cumulative 432 tons of gold bars and coins throughout 2025, a 28% increase from 2024, setting a new annual historical record. Against the backdrop of strong supply and demand in the precious metals market, why are these two gold companies adjusting their buyback services at this time?
A Caibai staff member told Jiemian News that starting February 6, the daily limit was reduced from 200 kilograms to 100 kilograms, with a maximum single-person buyback amount of 10 million yuan per day. No buyback business will be conducted on statutory holidays.
Previously, Jiemian News visited the gold recycling site before the limit adjustment. Just half an hour after the store opened, customers coming for buybacks had formed a queue hundreds of meters long. One customer told Jiemian News they specifically came to sell gold before the buyback limits took effect.
Since the beginning of this year, gold prices have exhibited an extreme “rollercoaster” pattern, accelerating to new highs before rapidly retreating. After breaking through the historic $5,500 per ounce barrier at the end of January, international gold prices once approached $5,600, then recorded their largest drop in 40 years. After further dipping to $4,402.06 per ounce during trading on February 2, prices began fluctuating repeatedly. Over the past seven trading days, spot gold price volatility and maximum drawdown have both exceeded 20%.
A futures trading professional told Jiemian News that listed precious metals and commodity-related companies typically have professional futures trading teams. Because the prices of raw materials or inventory held fluctuate significantly, they use hedging to lock risks within a controllable range.
According to Caibai Co., Ltd.’s (605599.SH) 2025 interim report disclosure, the company uses its own funds to conduct gold “T+D” contract (Trade+Delay) hedging business, primarily to hedge against operational risks brought by gold price fluctuations.
The aforementioned futures trading professional explained that this contract can be understood as “locking in the price now, with physical delivery in the future.” Ideally, for every gram of gold the counter buys, the trading department simultaneously sells one gram of gold via a T+D contract. When the company refines the bought-back gold into new jewelry for sale or sells the physical gold on an exchange platform, the previously sold T+D contract has fulfilled its purpose and requires a reverse “buy” operation to close the position.
Simultaneously, Ye Qianning also emphasized to Jiemian News that during extreme gold market conditions, irrational selling is easily triggered. Limits can guide investors towards rational trading, prevent “bank runs,” comply with regulatory requirements for gold circulation and risk prevention, and ensure business stability and continuity.
The aforementioned futures trading professional analyzed that by strictly executing hedging transactions, derivatives trading can bring additional investment income to companies.
Jiemian News reviewed Caibai Co., Ltd.’s 2025 interim report, which showed that during the reporting period, derivative investments for hedging purposes impacted profit and loss by 43.932 million yuan. Combined with other investment income like ineffective hedging, realized investment income reached 59.2651 million yuan.
However, Caibai Co., Ltd. also highlighted the inherent risks of derivatives trading in its annual report: The company’s purpose for conducting gold hedging business is not to seek risk returns but to lock in risks and hedge against operational risks from gold price fluctuations. However, the hedging market itself still carries certain systemic risks, and there may be risks of trading losses. Additionally, because the settlement method for deferred trading contracts is daily mark-to-market, this may result in excessive capital investment, leading to liquidity risk. In extreme cases, failure to replenish margin in time may result in forced liquidation and actual losses.
In fact, not all precious metals trading merchants have the capability to conduct hedging transactions.
A merchant from Shuibei told Jiemian News, “For small merchants, they basically don’t engage in risk hedging and have to bear it themselves. If volatility is very high, they might simply not do business or adjust prices based on the market, like during the Spring Festival. From what I understand, companies with large transaction volumes generally hedge risks on exchanges, and some small merchants also hedge on private platforms.”
The aforementioned futures trading professional believes that due to the high leverage of futures, risks are significant. Even if the market doesn’t experience extreme conditions, misjudging price trends could also lead to additional losses.
Looking at recent cases in the A-share market, Jiangte Motor (002176.SZ) disclosed in an announcement that as a holder of lithium carbonate, after September 2025, the company attempted to hedge against price decline risks by selling futures. However, the actual market trend was opposite: Lithium carbonate prices rebounded from less than 70,000 yuan per ton in September to 130,000 yuan per ton in December, resulting in floating losses on the futures side exceeding 10 million yuan, accounting for 10% of the company’s audited net profit attributable to the parent company in the most recent year.
Market analysis suggests that due to the explosion in energy storage demand, companies underestimated the rebound in lithium carbonate prices. The hedging direction deviated from the market trend, and hedging positions were not adjusted in time as spot prices rose, leading to futures losses that could not offset spot gains.
The aforementioned futures trading professional believes that a company’s hedging scale needs to be based on actual inventory, procurement, or sales plans and cannot be detached from operational needs. If the purpose is speculative profit, derivatives trading not only fails to hedge risks but becomes a risk itself.
Caibai Co., Ltd. also mentioned in its interim report that the company strictly controls hedging transaction positions and capital scale according to the principle of matching hedging business with production and operation scale. It follows the principle of separating decision-making, execution, and supervision functions to perform approval and execution procedures for conducting gold hedging business.
