Another major state-owned bank has announced the suspension of its precious metals agency business. Industrial and Commercial Bank of China (ICBC) issued a notice on June 24 stating that it will cease its agency business for individual precious metals spot trading on the Shanghai Gold Exchange (SGE) in one month's time. Prior to this, banks including Postal Savings Bank of China (PSBC) and Ping An Bank have already announced the suspension of related services.
Heightened Risk Controls Amid Market Swings
Since last year, against a backdrop of extreme gold price volatility, banks have frequently intensified risk controls, accelerating the "deleveraging" of precious metals agency services. Recently, some banks have raised their margin ratios to as high as 140%. It is understood that in recent years, under regulatory guidance, the scale of SGE precious metals agency business at various banks has been significantly reduced. The recent rule adjustments primarily affect existing clients with open positions. In the view of industry insiders interviewed, the channels for individual investors to participate in the precious metals market will increasingly shift towards standardized, low-leverage products in the future.
Service Suspension Details
ICBC's notice stated that, based on precious metals risk management and business needs, effective from the end-of-day settlement on Friday, July 24, 2026, the bank will stop its agency business for individual precious metals spot trading on the SGE. The affected contracts include Au99.99, Au100g, Au99.95, PGC30g, Au(T+D), mAu(T+D), Ag(T+D), Au(T+N1), Au(T+N2), and others.
After the settlement completion on July 24, 2026, ICBC will close trading permissions for the agency individual spot trading business across channels including mobile banking, online banking, and branch counters at an appropriate time. Once closed, clients with open positions will have restricted permissions for closing positions, selling, or taking delivery.
The notice advised existing clients with positions to promptly use channels like mobile banking to sell, close positions, or take delivery on their various spot trading contracts and withdraw any remaining funds from their margin accounts. For clients with no positions, no inventory, and no outstanding debts, the bank will later handle batch withdrawals of remaining funds in margin accounts on their behalf.
ICBC is not the first bank to announce such a suspension. Since last year, PSBC has issued multiple notices regarding adjustments to its SGE individual precious metals trading agency business, informing clients that the bank will stop this service.
Among joint-stock banks, Ping An Bank and China Guangfa Bank (CGB) have also announced impending suspensions. A notice from Ping An Bank on June 10 indicated that, according to business development needs, the bank will close trading permissions for SGE individual precious metals agency business spot contracts after market close and settlement on the cutoff date of June 30, 2026. It reminded clients to complete operations such as inventory selling, fund withdrawals, and account termination before the deadline. CGB also plans to fully suspend related services by the end of this month.
As early as March, Ping An Bank had announced via its official website that it would gradually close related business permissions and exit the business starting April 1, depending on circumstances. That notice mentioned the adjustments were made to further prevent market risks and protect investor rights, based on recent international precious metals market conditions and the bank's risk control requirements.
It is understood that in recent years, under regulatory guidance, the scale of SGE precious metals agency business at various banks has been significantly reduced. Most institutions had already suspended new account openings and new position openings for related businesses, meaning the recent rule adjustments mainly impact existing clients.
For example, according to ICBC customer service, the bank had already suspended opening new positions for SGE individual precious metals deferred delivery contracts and buy transactions for individual gold spot physical contracts starting from 9:00 on August 15, 2022. The aforementioned Ping An Bank notice also mentioned the bank had gradually suspended spot physical buy transactions and deferred delivery position openings since November 2021. CGB had also suspended opening new positions for SGE individual precious metals deferred delivery contracts and buy transactions for spot physical contracts starting September 1, 2022, advising clients in related notices to monitor their account funds, reasonably control positions, and opportunistically close deferred delivery positions and sell spot physical contracts.
"SGE agency individual precious metals trading is a leveraged derivatives business with high risks, which has triggered multiple disputes between individual investors and banks. ICBC's suspension of this business is an adjustment made by banks under the current market environment, based on considerations including risk control, regulatory compliance, and investor protection," said Dong Ximiao, Chief Researcher at Zhaolian and Executive Director of Shanghai Finance and Development Laboratory.
Previously, several banks had already cleaned up dormant or inactive accounts for this business, and some had contracted business channels. This round of historic volatility in precious metals prices is also believed to have accelerated banks' cleanup of existing business.
Dong Ximiao stated that from a market risk perspective, international gold and silver prices fluctuate violently due to geopolitical conflicts, US dollar policy, and inflation expectations. Individual investors often lack professional risk control capabilities, making them prone to forced liquidations or even losses exceeding margin in extreme market conditions. As agency intermediaries, banks find it difficult to completely avoid credit and reputational losses. The marginal cost of continuously providing trading channels for a large number of inactive retail clients now far exceeds the benefits.
Escalating Margin Requirements
Precious metals deferred delivery products involve margin trading, carrying risks of massive profits or losses in short periods, forced position liquidations, and losses exceeding invested capital. Particularly when an SGE trading product hits its daily price limit, there may be an inability to execute buy or sell orders, risking the loss of all margin and trading funds, potentially insufficient to cover trading losses.
Since last year, as gold prices repeatedly set historic records, the SGE has adjusted contract margin levels and price limits multiple times. Banks have also generally increased the frequency of strengthening risk controls for precious metals businesses, with one primary method being raising investment thresholds. For SGE individual precious metals agency business, banks have widely increased margin ratios, driving leverage ratios below 1x.
Recently, as US-Iran talks made significant progress, international gold prices rebounded from lows. However, the Federal Reserve's hawkish expectations intensified the battle between bulls and bears, causing the spot price of gold in London to plummet again. On the 23rd, London spot gold once broke below the $4,100 mark, representing a decline of up to 27% from its peak earlier this year.
Against this backdrop, Bank of China (BOC), CGB, and Hua Xia Bank further raised margin ratios for SGE individual deferred business. Looking back to June, several major state-owned and joint-stock banks have adjusted margin ratios for this business, with the highest currently raised to 140%. Earlier in February, major banks including Agricultural Bank of China (ABC) and ICBC had already raised related contract margin ratios to 100%.
On June 22, BOC announced that, effective from the close and settlement on June 24, the margin ratio multiplier for its gold deferred contracts would be adjusted from 666% to 800%. Consequently, the client margin ratio for its gold deferred contracts was adjusted from 99.9% to 120%. Simultaneously, the client margin ratio for its silver deferred contracts was adjusted from 99.96% to 119.91%.
On the same day, Hua Xia Bank announced that its client margin ratio for gold deferred contracts was adjusted from 100% to 140%, and for silver deferred contracts from 100% to 140%.
Future Market Outlook and Investor Channels
Currently, the international precious metals market is still experiencing severe volatility. From a long-term perspective, in Dong Ximiao's view, channels for individual investors to participate in the precious metals market will increasingly shift towards standardized, low-leverage products like gold accumulation plans and gold ETFs. SGE spot trading will gradually return to being a professional inter-institutional market. This aligns with the regulatory direction of finance serving the real economy and helps investors establish rational allocation concepts, avoiding blind speculation.
Facing weakening gold prices, major international banks have recently lowered their price targets. Goldman Sachs significantly lowered its year-end 2026 gold price target by $500 to $4,900 per ounce, citing no expectation for a Fed rate cut within the year. The bank's economists have pushed back the timing of the next rate cut to 2027, which would directly weaken expectations for subsequent inflows into gold ETFs. Goldman Sachs also warned that if the Fed initiates rate hikes within the year, the year-end gold price could fall to $4,400 per ounce.
Regarding the future pricing logic and trend analysis for gold, Cheng Qiang, Chief Economist and Head of Research at Debon Securities, stated that gold will become an asset with more diverse and complex pricing factors. Its price movements will be alternately dominated by financial, monetary, and safe-haven attributes at different stages. Understanding gold also requires shifting from a single framework to a more flexible multi-factor response system. "The long-term logic for gold remains intact. After the阶段性 adjustment since March, gold prices have partially released pressure. London gold entered a range worth monitoring after breaking below $4,098 per ounce. Subsequent attention should also be paid comprehensively to geopolitical situations and rate cut expectations," he said.
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