Banks Collectively Tighten Risk Control Defenses in Gold Business

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Source: Beijing Business Daily

Influenced by expectations of Federal Reserve rate cuts, geopolitical factors, and U.S. dollar credit, international gold prices are repeatedly hovering around the $5,000 mark. As gold prices fluctuate, topics like “banks increasingly difficult to buy gold bars,” “gold prices falling but unable to buy,” and “gold sold out at 9:01 AM when sales start at 9:00 AM” have trended on hot searches. Behind this, many banks are intensively tightening their precious metals business risk defenses.

Analysts point out that the overall adjustment of banks’ precious metals businesses is a move to divest high-risk brokerage activities, retain low-risk operations aligned with their core positioning, and improve risk management by raising thresholds and screening clients to better match their risk tolerance and regulatory requirements.

Banks Issue Urgent Notices to Close Accounts

On March 17, Minsheng Bank announced that due to significant volatility in the precious metals market, it reminds personal clients who have not yet terminated their precious metals accounts to promptly close or extend contracts, sell inventory, withdraw funds, and terminate their accounts to prevent market risks. The bank will continue to promote the termination and closure of agency precious metals accounts.

Specifically, this situation stems from Minsheng Bank’s announcements on June 21, 2022, and January 17, 2023, regarding adjustments to agency trading permissions for personal precious metals spot and deferred transactions. According to these notices, the bank closed the buy and open position functions for agency trading of Shanghai Gold Exchange (SGE) personal precious metals spot and deferred transactions starting after market close on July 22, 2022; on February 1, 2023, it began terminating agency accounts for clients with no inventory or deferred positions, with client margins automatically transferred out. This “revisiting old issues” is another push for clients to quickly close, withdraw, and terminate their accounts.

Similarly, on March 17, Postal Savings Bank also issued a notice about suspending agency trading of Shanghai Gold Exchange personal precious metals, stating that if clients do not complete operations by March 27, 2026, 0:00, the bank will enforce forced liquidation or inventory sell-out to protect account security and rights. Funds from forced sales will be automatically transferred to the client’s settlement account linked to the agency account.

In fact, besides these banks, Ping An Bank and Industrial Bank have also announced adjustments to their agency services for SGE personal precious metals trading. Ping An Bank will gradually shut down related permissions and exit the business starting April 1, 2026, depending on circumstances. For existing clients, the bank advises logging into the “Jujinbao” app or visiting branches before March 31 to close positions, sell inventory, transfer funds, and terminate accounts.

Industrial Bank will close its personal online banking channels for agency trading of SGE precious metals after February 14, 2026, while counter and mobile banking services remain open. It also reminds clients who have not yet terminated their accounts to do so promptly.

Jiang Shu, Chief Analyst at Shanghai Xirang Industrial Co., Ltd., states that the contraction of commercial banks’ agency precious metals business is not driven by a single market factor but is a comprehensive result of regulatory guidance, industry risk events, and the banks’ own characteristics. “This contraction trend is not directly related to gold price fluctuations,” Jiang explains, noting that domestic banks’ involvement in agency precious metals business stems from specific historical backgrounds.

In November 2007, the People’s Bank of China approved the Shanghai Gold Exchange to offer gold spot deferred delivery products through commercial banks to individual clients. In early 2009, Industrial Bank launched such products nationwide, becoming the first domestic bank to do so. Subsequently, several banks joined.

“However, later, some risk incidents within the industry prompted regulators to clarify that commercial banks should focus on prudent operations and avoid engaging in large-scale commodity brokerage activities, mainly to prevent depositors from suffering losses due to high-risk investments. This has become a key ‘accelerator’ for the withdrawal of banks from precious metals businesses,” Jiang further explains. Over the past five years, the overall strategy has been a continuous contraction of bank agency precious metals services.

Wu Zewei, a special researcher at Shangshang Bank, also believes this phenomenon is mainly driven by the combined effects of market risk, business cost-effectiveness, and regulatory compliance. Due to sharp fluctuations in gold prices, leveraged deferred trading poses significant risks of margin calls, and individual investors’ risk control capabilities are relatively weak. Banks, as clearing members, bear the responsibility for settlement advances, increasing risk exposure. Additionally, the limited profit from agency commissions, coupled with the need for substantial resources for risk control and compliance, further compresses margins. As regulatory requirements for investor protection tighten, banks must invest more in investor education and risk monitoring, leading to a reassessment of business value and a proactive withdrawal to prevent potential risks.

Accumulated Gold Reserves May Relax with Market Fluctuations

Besides directly terminating existing client accounts and withdrawing from related agency services, many banks are also tightening their risk controls on accumulated gold deposit services through quota management and dynamic spread adjustments.

For example, China Construction Bank announced that starting March 4, it will implement dynamic trading limits on CCB Gold (including Easy Deposit Gold). Industrial and Commercial Bank of China (ICBC) stated that from February 7, 2026, on weekends and public holidays, it will impose limits on the Yu Yi Gold deposit service, including maximum daily deposit/redemption limits for individual clients and per-transaction limits, with dynamic adjustments. Jinshang Bank also indicated that in case of sustained market volatility, it will adjust gold account trading spreads accordingly.

Jiang Shu believes that the gold deposit business is one of the few precious metals-related services that banks still offer to individual clients and is unlikely to be completely shut down. However, due to increased gold price volatility over the past six months, this business is currently undergoing significant tightening. This adjustment is a temporary risk control measure in response to short-term market conditions and is expected to loosen as market trends stabilize.

“Bank tightening of gold deposit services is also part of the overall risk management in the precious metals market, forming a unified industry risk control rhythm,” Jiang adds. The current direction of bank adjustments mainly involves raising investment thresholds and screening for quality clients, setting higher entry standards to reduce disputes caused by small investors chasing short-term gains, rather than completely stopping the business. Essentially, the overall adjustment of banks’ precious metals activities aims to divest high-risk brokerage operations, retain low-risk core services, and improve risk compatibility through higher thresholds and client screening.

Wu Zewei predicts that future personal gold business will see a gradual reduction in leverage, a shift from trading channels to asset allocation services, and increased client suitability management, guiding investors toward long-term asset allocation rather than short-term speculation.

How will the intensive adjustments of banks’ precious metals businesses affect ordinary investors? Wu Zewei states the main impacts are reduced trading flexibility, higher business entry standards, and the unavailability of leveraged trading tools. For existing clients, the key is to closely follow bank notices and complete closing, withdrawal, and termination procedures before deadlines.

He also advises that if investors view gold as part of their long-term asset allocation, they should consider physical gold, gold savings, or gold ETFs, assess their risk tolerance carefully, and avoid investing with non-own funds. Given the recent short-term rapid rise and subsequent volatility in gold prices, investors should be fully aware of these risks.

Beijing Business Daily Reporter: Meng Fanxia, Zhou Yili