🇨🇳 China Banks Exit Retail Gold Leverage

At least 12 major Chinese lenders are winding down retail leveraged trading in gold and silver after the Shanghai Gold Exchange pushed the retreat, according to a South China Morning Post report. Banks including ICBC, Bank of China and China Construction Bank are ending products that allowed retail clients to trade precious metals on margin, while China Everbright Bank and Shanghai Pudong Development Bank have issued recent phase-out notices.

Chinese banks have offered these leveraged precious-metals products for nearly two decades, typically mirroring Shanghai Gold Exchange margin rules and providing five- to six-fold leverage. Since last year’s rise in gold-price volatility, lenders have steadily lifted margin requirements; by the end of Q1, major state banks had raised them to 100 per cent, effectively removing leverage and accelerating a broader exit from the segment.

Banks are redirecting retail clients toward fixed-price accumulation plans and physical precious-metals purchases instead of margin-based trading. The shift also reflects tighter risk controls after earlier losses linked to retail commodity investment products.

#China

@asianomics