At least a dozen Chinese banks intend to wind down retail used precious-metals trading following directives from the Shanghai Gold Exchange, ending a practice where everyday investors post margin deposits to speculate on gold and silver contracts without owning physical metal.
Sources at two lenders, including Industrial and Commercial Bank of China, confirmed the retreat was mandated by the exchange amid sharp swings in international gold prices.
Exchange Mandate Halts Retail Exposure
Beijing-based China Everbright Bank said on Friday that it would phase out retail used precious-metals trading for gold and silver after October 19, following a comparable notice from Shanghai Pudong Development Bank earlier this month.
For almost twenty years, domestic banks allowed retail investors to open precious-metals positions using margin ratios aligned with the Shanghai Gold Exchange. That setup granted individual accounts between five-fold and six-fold use. The current directive instructs lenders to shut these channels completely, pushing individual clients toward physical purchases and fixed-price accumulation plans.
Regulators Eliminate Speculative use
Market turbulence in precious metals forced commercial banks to tighten trading rules throughout the past year. By the end of the first quarter, state-owned lenders had raised margin requirements for retail precious-metals contracts to 100 percent. That step removed operational use before the formal shutdown.
Orient Futures analyst Xu Ying said: “This represents an inevitable shift, and I anticipate that all the lenders will eventually exit the business.”
Shifting Retail Capital Into Physical Bars
The forced wind-down alters precious-metals distribution across mainland China. Commercial lenders will no longer act as clearing brokers for individual speculative traders. Instead, banks will redirect foot traffic into physical bullion counters, minted commemorative coins, and non-used regular accumulation plans.
Wealth-management desks will lose fee income generated by short-term contract turnover. However, the closures eliminate retail customer default risks during sharp intraday commodity swings. Retail exposure will transfer directly into settled physical ownership.
Precedents and Margin Escalation
Chinese authorities have worked in stages to ring-fence households from high-volatility commodity derivatives. State lenders initiated the first round of account restrictions during previous commodity price spikes. They capped new account openings first, then raised margin thresholds across all retail tiers.
Member commercial banks and the Shanghai Gold Exchange will now finalize account liquidation schedules, with Everbright Bank carrying out its formal operational cutoff after October 19.
