Editor’s Note
As gold prices exhibit significant volatility, multiple commercial banks are adjusting their precious metals trading services for retail clients. This follows a broader trend of financial institutions tightening risk controls in response to market fluctuations.
As gold prices fluctuate frequently, banks have once again tightened trading restrictions on precious metals-related businesses.
Recently, Industrial Bank announced that after February 14, it will close the online banking channel for individual clients to trade precious metals through its agency service for the Shanghai Gold Exchange (SGE). Counter and mobile banking channels will remain open.
Prior to Industrial Bank, several other banks including Industrial and Commercial Bank of China (ICBC), China Construction Bank (CCB), Agricultural Bank of China (ABC), Postal Savings Bank of China (PSBC), and China Everbright Bank have also adjusted this business.
Industry insiders point out that the recent sharp fluctuations in precious metals prices have prompted banks to intensively adjust their precious metals businesses to prevent risks from significant volatility in global commodity prices.
In its announcement, Industrial Bank noted the current high volatility and significant risks in the precious metals market. It reminded individual clients who have not yet terminated their contracts to expedite the closing of deferred positions, selling of inventory, withdrawing funds, and contract termination. The bank stated it will continue to adjust client trading channels based on market conditions and business development needs.
Industrial Bank has adjusted its SGE personal precious metals trading business multiple times in recent years. It is understood that the bank issued announcements on June 7, 2022, and December 15, 2022, and after market close on July 15, 2022, it disabled the opening of new deferred contracts and buying of spot contracts for its SGE agency service. It also settled and terminated agency relationships for accounts with no positions, inventory, or debts. The latest closure of the online banking channel represents a further tightening of its personal precious metals trading business.
Besides Industrial Bank, several other banks have gradually closed parts of their SGE personal investment services. In December last year, ICBC announced that starting December 19, 2025, it would close related business functions for “three-no” clients (no activity, no positions, no inventory) of its SGE agency service, reminding clients with remaining balances to transfer funds promptly.
CCB also closed related functions for clients of its SGE agency service who had no transactions, positions, inventory, funds, or debts for 12 consecutive months, effective September 8 last year.
Furthermore, some joint-stock banks have adjusted this business. China Everbright Bank announced in October last year that it would gradually terminate agency relationships via system adjustments for clients signed up for SGE spot and deferred business who hold no positions. For clients with no positions but funds remaining in their margin accounts, the bank will return the funds to their linked bank accounts after termination.
The personal precious metals trading business involves financial institutions with SGE personal agency qualifications acting as agents for individual clients to participate in SGE gold spot physical trading, providing related fund clearing services. However, during periods of high precious metals volatility, individual investors face significant investment risks.
In fact, since July 2022, major banks have comprehensively suspended new account openings for such businesses. A banking industry insider stated this is one of the important measures for banks to control risks in precious metals businesses. The current adjustments are part of the subsequent cleanup of existing clients, which also means the access channel for this business to individual clients is essentially closed.
Furthermore, Dong Ximiao also pointed out that while high-risk leveraged trading channels for individuals are closing, banks’ precious metals businesses are still growing rapidly. For example, banks are actively promoting lower-risk investment products like gold accumulation plans, physical gold bar sales and repurchases to meet residents’ demand for gold as a safe-haven asset and for portfolio allocation. They also provide trading and custody services for insurance funds approved to enter the gold market, and supply chain financial services like gold leasing for gold-using enterprises. The future development space for banks’ precious metals businesses remains significant.
(Reporter Jiang Fan, Editor Chen Li, Proofreader Wang Xin)