Industrial and Commercial Bank of China, the world’s biggest bank by assets, will halt intermediary services for individual precious metals trading on the Shanghai Gold Exchange starting July 24, the latest major lender to pull back from retail leveraged bullion markets amid a sharp price downturn and tightening regulatory oversight.
The bank announced the decision on June 25, giving existing clients one month to close out their positions. It joins peers including Postal Savings Bank of China, Ping An Bank and China Guangfa Bank in rolling out sweeping restrictions on retail precious metals trading, marking a systematic retreat from a business line once widely marketed to ordinary Chinese investors.
The curbs apply to both spot and deferred delivery contracts for gold and silver. Lenders have suspended new account openings for retail traders, lifted margin requirements on some products to as high as 140% — effectively erasing all leverage — and set firm deadlines for position unwinding. China Guangfa Bank has told clients to liquidate holdings by June 30 or face forced liquidation, adopting a more aggressive timeline than state-owned peers.
The industry-wide clampdown has been building since late 2020, when banks first froze new retail precious metals accounts. Years of incremental tightening — from higher collateral thresholds to reduced trading hours — have now culminated in a full shutdown of bank-channel speculative trading for individual investors.
A brutal gold sell-off this year served as the immediate catalyst. Spot gold surged to an all-time high near $5,600 an ounce in January before collapsing almost 30% to below $4,000 by June, driven by a resurgent US dollar and market bets that interest rates will stay elevated for longer. The violent price swing has amplified default risks for leveraged retail positions, exposing banks to client losses, disputes and reputational fallout.
Beyond near-term market volatility, the move is rooted in a long-running regulatory push to de-risk retail financial products, a priority ever since the 2020 “Crude Oil Treasure” scandal. That episode saw retail investors suffer massive losses when crude oil futures turned negative, prompting regulators to order banks to scale back high-volatility leveraged products for unsophisticated consumers. By channeling high-risk precious metals trading toward institutional participants, authorities aim to reduce systemic risks and protect small investors from outsized losses in turbulent markets.
Crucially, the restrictions do not block all forms of gold investment for Chinese households. Physical bullion, coins and jewelry sales remain fully operational. Retail investors can still gain exposure through bank gold accumulation plans, precious metals exchange-traded funds, or futures contracts via brokerage accounts on the Shanghai Futures Exchange.
For China’s bullion market, the shift signals the end of easy-access retail leveraged trading through bank channels. Analysts expect the market to become increasingly institutional and professionalized, a transition that should dampen speculative swings and support longer-term market stability.
