Recently, gold prices have experienced significant fluctuations again. After previously plunging to 829.88 yuan per gram, gold prices have rebounded recently. As of November 5, gold prices recovered to 888.14 yuan per gram. Amid the sharp volatility in gold prices, several banks including Industrial and Commercial Bank of China and China Everbright Bank have once again issued risk warnings about precious metals market fluctuations, urging investors to participate in investment trading rationally and avoid blindly chasing rallies or dumping during declines. Meanwhile, Industrial Bank has discontinued its agency business for individual customers trading precious metals on the Shanghai Gold Exchange. At the same time, many banks are attracting customers through discounts on accumulated gold products.
Industry insiders generally believe that gold prices will continue to fluctuate in the coming period, and they recommend investors to deploy in batches during volatility, using long-term batch investments to dilute investment costs. If risk tolerance is low, short-term large lump-sum purchases are not recommended, nor is frequent trading, which can easily erode returns.
Multiple Banks Warn of Investment Risks and Exit Leveraged Precious Metals Business
Recently, facing gold price volatility, multiple banks have once again warned of investment risks. Industrial and Commercial Bank of China's "ICBC Gold Banker" official account issued a notice stating that recently, due to the combined impact of multiple complex factors, precious metals market price fluctuations have increased significantly. To protect asset safety, investors are advised to closely monitor market dynamics, participate in investment trading rationally, and avoid blindly chasing rallies or dumping during declines. ICBC recommends adhering to the concept of "diversified investment and long-term allocation," effectively smoothing short-term volatility risks through diversified layouts.
China Everbright Bank also pointed out that recently, domestic and international precious metals price fluctuations have intensified, and market risks have increased. The bank advises investors to pay attention to market changes, enhance risk prevention awareness in precious metals business, reasonably control positions, timely monitor holdings and margin balance changes, invest rationally, and protect their own property safety.
It is worth noting that recently, multiple banks have also exited leveraged precious metals business. Industrial Bank issued an announcement stating that it will discontinue its agency business for individual customers trading precious metals on the Shanghai Gold Exchange. After clearing is completed on November 6, the bank will stop handling agency business for individual customers trading precious metals on the Shanghai Gold Exchange and will close trading channels including branch counters, personal online banking, mobile banking, and personal customer PC trading terminals at an appropriate time. After the business is discontinued and trading channels are closed, customers' permissions for closing positions, selling, delivery applications, deposits and withdrawals, and inquiries will be restricted. Customers are requested to handle position closing, inventory selling, delivery applications, and margin withdrawals as soon as possible before this time. Meanwhile, after the business is discontinued and trading channels are closed, for positions, inventory, or funds still remaining in trading accounts, the bank will uniformly handle batch position closing, selling, and withdrawals on behalf of customers.
Industrial Bank is not an isolated case. Since the beginning of this year, more than ten banks including Postal Savings Bank of China, China Merchants Bank, and Industrial and Commercial Bank of China have successively tightened or discontinued this business, with China Everbright Bank fully discontinuing it starting from October 19. Dong Ximiao, chief economist of Zhaolian, stated that since risk events such as the 2020 "Crude Oil Treasure" incident, regulatory authorities have continued to tighten bank financial derivatives business. Acting as an agent for individual customers in Shanghai Gold Exchange precious metals trading is a leveraged derivatives business with drastic price fluctuations. Individual investors with insufficient risk tolerance can easily suffer significant losses. "Such business has triggered multiple disputes where individual investors sued banks," Dong Ximiao said. Banks proactively clearing out inactive "three-no" customers (no positions, no inventory, no debt) is a measure to fulfill investor suitability management obligations and avoid potential disputes.
In fact, since July 2022, major banks have fully suspended new account openings for such business. The current adjustment is a follow-up cleanup for existing customers, marking that the channel for this business to individual customers is essentially closed.
Accumulated Gold Business Expanding, Some Banks Enter Discount Competition
Unlike banks discontinuing agency business for individual customers trading precious metals on the Shanghai Gold Exchange, many banks are currently vigorously promoting accumulated gold business. Many banks are carrying out promotional activities to reduce certain fees. For example, China CITIC Bank from 0:00 on October 1 to 24:00 on November 30, individual accumulated gold real-time purchase and regular investment fee rates remain at 50% discount, namely 0.30%, with no fees for selling. Industrial and Commercial Bank of China also offers proactive accumulation fee rates reduced from 0.5% to 0 until November 28, with regular investment also discounted to 0. As of December 31, the redemption fee rate remains unchanged at 0.5%. Bank of Nanjing also launched limited-time accumulated gold offers from October 8 to December 31 for customers in Jiangsu, Beijing, Shanghai, and Hangzhou regions. Customers with cumulative trading volume exceeding 500 grams within the year can enjoy a 1-fold discount on the original preferential rate for purchase fees, namely 0.01%, and a 50% discount on selling fees, namely 0.15%. Customers with 500 grams or less enjoy 50% discounts on both buying and selling, at 0.05% and 0.15% respectively.
It is worth noting that some internet banks have also joined in. Baixin Bank recently launched an accumulated gold product that requires no monitoring. Investors can preset target trigger prices in advance, choose buy or redeem direction, and when the market real-time gold price reaches the preset price, the system will automatically complete the transaction. At the same time, the product maintains a 2.2 yuan per gram bid-ask spread, with no account opening fees, management fees, redemption fees, or other additional charges, and extends night trading until 2 AM.
Some industry insiders pointed out that banks are currently vigorously promoting lower-risk investment products such as accumulated gold and physical gold bar sales and repurchases to meet residents' demand for gold as a safe-haven asset and asset allocation. From the discount perspective, mainly the purchase side has discounts, intended to guide investors toward long-term allocation rather than encouraging short-term trading. In the future, there is still significant room for development in bank precious metals business.
Gold Prices Will Remain Weakly Volatile, Investors Should Not Make Large One-Time Purchases
Recently, gold prices have continued to be volatile. After a significant decline last week, gold prices have rebounded this week. Qu Rui, an analyst at the Research and Development Department of Orient Gold Credit, stated that affected by tightened monetary policy expectations and liquidity disturbances, gold prices continued to fall significantly last week. This week, gold prices remain weakly volatile. In Qu Rui's view, after the Federal Reserve's interest rate meeting, the Fed has entered the end of its silent period. Multiple officials at the meeting believed that although there is no rush to raise rates currently, subsequent actions are still needed to combat inflation. As public speeches resume, officials will likely strengthen the December rate hike option, and market expectations will be difficult to cool down quickly, continuing to limit the height of gold price rebounds.
"The trend of US technology stocks is the main short-term influence," Qu Rui pointed out. If the technology stock adjustment continues, cross-market liquidity selling pressure will still transmit to gold, and gold prices may test lower levels again. If technology stocks stabilize and market panic eases, gold prices are expected to continue technical repair after excessive declines. A research report from Tianfeng Securities also pointed out that the current US midterm elections may push real interest rates down and the dollar weaker, thereby benefiting gold price trends. Additionally, affected by geopolitical factors, oil prices may fall, and political confrontation between the two parties may also provide support for gold.
However, a bank wealth manager stated that if investors have no gold positions at all, they can purchase an appropriate amount based on their own circumstances. But investors who already have positions and are still profitable should not blindly follow the trend and bottom-fish. "It is feasible for investors to invest in gold through bank accumulated gold products," suggested Zhou Yiqin, a senior expert in financial regulation. Investors can deploy in batches during volatility, using long-term batch investments to dilute investment costs. If risk tolerance is low, short-term large lump-sum purchases are not recommended, nor is frequent trading, which can easily erode returns. In particular, non-professional investors should stay away from leveraged gold financial products and must avoid short-term speculation by chasing rallies and dumping during declines.
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