Editor’s Note
As gold prices exhibit significant volatility, major banks are adjusting their precious metals trading services to mitigate risk. This reflects broader financial sector efforts to enhance stability in uncertain markets.
Since the beginning of this year, international gold prices have experienced violent fluctuations, presenting a “roller coaster” trend. Against this backdrop, multiple banks have successively adjusted their personal precious metals trading businesses to cope with market risks.
Recently, Industrial Bank issued an announcement stating that it will close the personal online banking trading channel for its agency business of the Shanghai Gold Exchange (SGE) personal precious metals trading starting from February 14th. Trading channels such as counter services and mobile banking will remain open normally.
The announcement pointed out that the current precious metals market is experiencing violent fluctuations with significant market risks. The bank once again reminded individual clients who have not yet completed the termination of their agreements to promptly handle the closing of deferred contracts/selling of inventory, fund withdrawals, and agreement termination procedures. It also stated that it will adjust client trading channels in the future based on market conditions and business development needs.
On February 9th, Qu Rui, Senior Associate Director of the Research and Development Department at Oriental Jincheng, analyzed for the *China Times* reporter that banks are making such adjustments primarily because the extreme volatility in international gold prices recently has led to excessive gold risk exposure. The risks faced by banks, including client margin calls, disputes, and reputational risks, have surged dramatically. Especially for leveraged products like deferred contracts, they can easily trigger a chain reaction of “forced liquidation – price drop – more forced liquidations.”
Through inquiries, the reporter learned that multiple banks are tightening their personal precious metals trading businesses by cleaning up dormant accounts and increasing margin ratios.
According to business descriptions disclosed by several banks, banks with the qualification as financial member agents of the SGE can provide eligible individual clients with channels to participate in SGE trading. They conduct spot precious metals and deferred contract trading based on client mandates, while also handling fund settlement, margin management, and other related businesses on behalf of clients.
The reporter found on the SGE official website that currently, there are 25 banking institutions in its list of financial members, including the six major state-owned banks, 11 joint-stock banks, 5 city commercial banks, 2 rural commercial banks, and 1 private bank.
In fact, signs of such adjustments have been evident for some time. Multiple financial institutions, including Industrial and Commercial Bank of China (ICBC), China Construction Bank (CCB), and Postal Savings Bank of China (PSBC), have successively issued announcements announcing the tightening of this business.
In December 2025, ICBC issued an announcement stating that to adapt to market changes and protect investor rights, it would strengthen the management of its agency SGE personal precious metals trading business. The announcement clarified that clients with no open positions, no inventory, no outstanding debts, and remaining balances in their margin accounts should promptly complete fund transfer procedures. The bank would batch transfer the balances from the margin accounts of such clients to the settlement accounts linked to this business starting December 19, 2025, and close the related business functions. At that time, the agency agreements signed by both parties would terminate. The bank also advised clients to control their position sizes to guard against market risks.
PSBC also announced that it would cease its agency SGE personal precious metals business starting January 12, 2026. The bank reminded clients that if they currently hold related deferred trading positions or spot inventory, they should independently complete closing or selling operations before the cessation date and make relevant arrangements in advance to avoid inconvenience caused by the business termination.
Recently, international gold prices have shown a pattern of high volatility. Since the beginning of 2026, gold prices have exhibited a “roller coaster” trend. On January 29th, COMEX gold futures prices briefly broke through $5,600 per ounce during trading, hitting a record high. However, within the subsequent 30 hours, prices plummeted by over 12%. By February 9th, they rebounded strongly by 5.53%. Currently, gold prices are fluctuating at high levels around $5,000 per ounce, with market volatility significantly increasing.
What is the driving logic behind such extreme market movements?
Qu Rui analyzed for the reporter that after Wash was nominated as a candidate for Federal Reserve Chair, the market began to worry that his past hawkish stance supporting significant balance sheet reduction would lead to some tightening of liquidity. This concern, against the backdrop of gold prices having accumulated substantial gains earlier, extremely sensitive market sentiment, and high susceptibility to news-driven disturbances, intensified panic selling in the market, thereby amplifying this round of gold price volatility.
However, as gold prices gradually fell back to a reasonable range and market sentiment returned to rationality, the market realized that while Wash’s stance of “interest rate cuts + balance sheet reduction” is hawkish, it does not completely negate the path of rate cuts. The market panic caused by Wash’s nomination has somewhat eased. Furthermore, considering that the underlying logic supporting the rise in gold prices has not changed, investors chose to enter the market on dips, driving the rebound in gold prices.
Qu Rui further stated that under the trend of reshaping gold’s pricing logic and evolving role, the fundamental factors supporting the upward movement of gold prices in recent years will continue to play a role. It is expected that international gold prices will rise to $6,000 per ounce. Specifically, the global political and economic order will continue to adjust, differentiate, and reorganize, and there remains significant uncertainty in the international situation. Factors such as the long-term and normalized geopolitical risks, impaired US dollar credibility, intensified US fiscal risks, the continuation of the Federal Reserve’s interest rate cut cycle, and strategic gold purchases by central banks of various countries will continue to affect the gold market and support the upward movement of gold prices.
Amid the violent fluctuations in gold prices, banks and regulatory agencies have also intensively issued risk warnings. On February 9th, the Shanghai Gold Exchange issued a notice requiring all member units to enhance risk prevention awareness, meticulously prepare risk contingency plans, remind investors to do a good job in risk prevention, reasonably control positions, invest rationally, and ensure the stable and healthy operation of the market.
