Recent volatility in international precious metals prices has prompted banks to once again tighten their gold trading businesses.
On June 12, China Merchants Bank (600036.SH) issued an announcement adjusting the risk control rules for its "Zhaocai Gold" agency precious metals deferred delivery business. Effective from the close and settlement on June 16, the margin call ratio for multiple contracts including Ag (T+D), Au (T+D), mAu (T+D), Au (T+N1), Au, NYAuTN06, and NYAuTN12 will be uniformly raised to 120%.
This marks another major bank tightening risk controls following a series of margin hikes for precious metals by state-owned giants like Industrial and Commercial Bank of China (601398.SH), China Construction Bank (601939.SH), and Agricultural Bank of China (601288.SH) earlier in June, indicating a continued industry-wide strengthening of regulatory measures.
Wu Zewei, a special researcher for Jiangsu Suning Bank, pointed out that this round of banks raising margin requirements for personal precious metals deferred business to 120% is driven by three factors: market conditions, regulatory requirements, and institutional risk control. Volatility in international precious metals markets continues to increase, with macro monetary policies and external geopolitical environments creating multiple disturbances, raising the probability of sudden, sharp price swings. Regulators are consistently guiding institutions to implement investor protection requirements and solidify the risk control obligations of financial entities. Banks, by raising margin requirements, are compressing trading leverage to avoid the risk of accounts going into deficit during extreme market conditions.
"The related adjustments can curb irrational speculative behavior, balancing the protection of investor assets with the stable operation of banking businesses," Wu said.
Personal Gold Trading Business Continues to Tighten
Since 2026, the international gold market has experienced turbulent fluctuations, with persistently high market risks forcing commercial banks to continuously tighten their risk control thresholds. London spot gold hit a high of $5,600 per ounce earlier in the year before rapidly retreating. Entering June, market volatility intensified further. Fluctuating expectations for Federal Reserve rate cuts, a wavering US dollar index, and unstable geopolitical sentiment have combined to make intraday price movements of precious metals unpredictable, continuously amplifying trading risks.
As of June 11, London gold had experienced its largest pullback of the year, exceeding 28%, leading the industry to believe the market has entered a technical bear market zone.
Facing this complex market environment, major banks have progressively advanced their risk control upgrades. In the first quarter of this year, several banks had already raised the margin for agency personal precious metals deferred business to 100%, completely removing trading leverage. Entering June, industry risk controls were tightened again, with multiple institutions further raising the margin ratio for various types of contracts to 120%.
Looking at China Merchants Bank's latest announcement on June 12, the bank has implemented a phased adjustment of its "Zhaocai Gold" business rules this year. Following an increase in margin for contracts like Au (T+D), mAu (T+D), Au (T+N1), Au (T+N2), NYAuTN06, and NYAuTN12 to 70% in February, the bank further raised the threshold to 100% in March, completely shutting down new leverage channels for retail investors. On June 6, it announced revisions to its "Zhaocai Gold Agency Personal Precious Metals Deferred Delivery Trading Business Agreement," adding forced liquidation margin risk control requirements. On June 12, it further officially announced raising the margin call ratio for some target contracts to 120%.
Apart from China Merchants Bank, state-owned major banks simultaneously initiated risk control tightening in June.
On June 2, Industrial and Commercial Bank of China and China Construction Bank simultaneously announced they would raise the margin for deferred contracts including Au (T+D), mAu (T+D), Au (T+N1), and Au (T+N2) to 120% on June 5 and June 4, respectively. ICBC also raised its forced liquidation margin ratio from 80% to 100%.
Agricultural Bank of China issued an announcement on June 4, with new rules taking effect from the close and settlement on June 5. The bank adjusted the margin ratio for Au (T+D) and Ag (T+D) deferred contracts from 100% to 120%. Prior to this, ABC had already tightened price limit rules. Starting from the trading day after the close and settlement on June 1, 2026, the bank adjusted the daily price fluctuation limit for Au (T+D) deferred contracts from 17% to 14%, and for Ag (T+D) deferred contracts from 23% to 20%.
Industry Business Transformation Accelerates
It is important to clarify that this round of margin ratio increases primarily targets existing clients with open positions. Currently, mainstream domestic commercial banks have long since begun a business contraction process, with many institutions successively suspending agency personal precious metals trading business for the Shanghai Gold Exchange, completely halting new account openings and new position establishment.
Wu Zewei pointed out that raising the margin ratio directly changes the position management rhythm for existing clients. Investors holding positions must either supplement available funds in their accounts or passively reduce their position sizes. Failure to cover a funding gap will result in forced liquidation. After leverage falls below 1x, capital efficiency significantly decreases, narrowing the scope for short-term, high-frequency trading. Short-term market trading activity may cool slightly, but higher capital reserves can hedge against large losses from sharp price volatility. In the long run, this can guide investors towards a lower-risk precious metals investment mindset.
A precious metals business staff member at a major bank in South China admitted that the biggest risk in precious metals this year might not be a one-sided decline, but rather unanticipated sharp two-way fluctuations. In past trending markets, investors could follow the trend to manage positions and stop losses. However, in the current wide-ranging, volatile market, overnight gaps in overseas markets and sudden intraday news disturbances are frequent. Even if retail investors set stop losses, they are highly prone to slippage losses. Coupled with some banks previously relaxing margin call thresholds for existing positions, many retail investors' existing positions have extremely thin safety cushions. Once the market gaps against their position, not only can the investor's principal be wiped out, but the bank also bears the cost of covering client account deficits and deficit payouts, continuously amplifying risk control vulnerabilities.
"On the other hand, the profit logic of the banks' own businesses has already shifted. In the past, banks relied on transaction fees and spreads from precious metals trading to generate revenue, encouraging high-frequency client trading. However, under the current trend of stricter capital regulation, the risk capital consumption for on-exchange precious metals deferred business is rising. The risk control and operational costs brought by high-frequency trading may far exceed fee income. Compared to the highly volatile T+D trading business, physical gold bars, gold accumulation plans, fixed investment plans, and gold pledge businesses carry lower risk and offer more stable cash flows, becoming the main revenue drivers for banks' precious metals divisions. Proactively tightening trading-related businesses is an independent choice for many banks transitioning towards lighter capital models," the staff member stated.