Editor’s Note
The Agricultural Bank of China has announced an adjustment to the margin ratio for its personal precious metal trading business, citing heightened market volatility and risk. This move is intended to safeguard investor interests.
On February 25, the Agricultural Bank of China (ABC) issued a “Notice on Adjusting the Margin Ratio for Deferred Contracts of Personal Precious Metal Trading Business Acting as Agent for the Shanghai Gold Exchange.” Due to intensified price fluctuations in the international precious metals market and increased market risks for personal clients’ precious metal trading businesses, ABC announced that to effectively protect investor interests, starting from the close and settlement on Thursday, February 26, 2026, the margin ratio for Au (T+D), mAu (T+D), and Ag (T+D) contracts will be adjusted from 80% to 100%.
The latest notice from ABC states that due to recent intensified price fluctuations in the international precious metals market and increased market risks for personal clients’ precious metal trading businesses, the bank has decided to adjust the margin ratio for Au (T+D), mAu (T+D), and Ag (T+D) contracts from 80% to 100%, effective from the close and settlement on Thursday, February 26, 2026. Further adjustments to the margin ratios for related contracts will be notified separately.
The bank’s precious metal deferred trading business is conducted in the form of margin trading, which involves leverage and carries relatively high risks. Banks can adjust the trading margin ratios for various contract types. When an investor’s account has insufficient trading margin, they cannot open new positions or buy spot; they can only close positions or sell spot. According to trading rules and relevant agreements, the bank may execute forced liquidation on an investor’s open positions until the agreed trading margin ratio requirements are met.
It is noted that not only ABC has recently adjusted the margin ratios for precious metal deferred contracts, but other major banks including the Industrial and Commercial Bank of China (ICBC), China Construction Bank (CCB), and Bank of China (BOC) have also made adjustments to this business.
ICBC notified on February 25 that it will adjust the trading margin ratio for deferred contracts acting as agent for personal clients. Starting from the close and settlement on Friday, February 27, 2026, the standard trading margin ratio for contracts including Au (T+D), mAu (T+D), Au (T+N1), Au (T+N2), NYAuTN06, and NYAuTN12 will be adjusted from 80% to 100%, with differentiated margins adjusted in the same direction and magnitude. The standard trading margin ratio for Ag (T+D) contracts will also be adjusted from 80% to 100%, with differentiated margins adjusted accordingly.
A lower margin ratio corresponds to a higher leverage multiplier. Raising the margin ratio to 100% reduces the corresponding leverage multiplier to 1.
On February 25, gold prices rebounded again, with the London spot gold price breaking through $5,190 per ounce intraday. Industry insiders pointed out that the current gold price movement is merely a rebound, not a trend reversal.
Looking ahead to 2026, the Qu Rui team at Dongfang Jincheng analyzed that under the trend of reshaping gold’s pricing logic and evolving role, the fundamental factors that previously supported the rise in gold prices will continue to play a role. Specifically, under the core principle of so-called “America First,” the Trump administration will continue to promote the reshoring of manufacturing to the U.S. and take more measures in response to midterm elections, such as pushing the Federal Reserve to cut interest rates and increasing fiscal spending. Meanwhile, tariffs and military threats will remain the Trump administration’s primary means of competing for foreign interests and overseas resources. This will lead to continued adjustment, differentiation, and reorganization of the global political and economic order, with significant uncertainty remaining in the international situation. Consequently, factors such as the long-term and normalized geopolitical risks, impaired U.S. dollar credibility, intensified U.S. fiscal risks, the continuation of the Fed’s interest rate cut cycle, and strategic gold purchases by central banks worldwide will continue to affect the gold market and support higher gold prices.
The Qu Rui team judges that the international gold price is expected to rise to $6,000 per ounce in 2026, but it is important to note that price volatility will increase. With the rapid rise in gold prices and accumulated significant gains, market sentiment has become more sensitive and is prone to sharp fluctuations due to news-driven disturbances, leading to intensified gold price volatility.
The Qu Rui team pointed out that the Fed’s interest rate cuts and the development of rate cut expectations are important forces driving gold prices higher. In 2025, against the backdrop of a continuously weakening U.S. labor market, economic softness, and inflation approaching target levels, the Fed restarted its rate cut cycle in September and cut rates three times consecutively, reducing the federal funds rate by 75 basis points for the year to the target range of 3.50%–3.75%. In 2026, the Fed will still be in the process of a rate cut cycle, which will continue to provide support for gold prices, but there is significant uncertainty regarding the magnitude and path of the rate cuts.