China Everbright Bank Company Limited recently announced it will suspend its precious metals agency business for individual clients on behalf of the Shanghai Gold Exchange, effective from October 19, 2026. The move follows a broader industry trend as more than 10 Chinese banks have already terminated or announced plans to terminate similar retail gold-trading channels this year.

The suspended business includes agency services for both spot and deferred precious metals trading. Deferred trading, which operates on a margin basis, carries leverage characteristics and therefore higher risk. Sources familiar with the matter indicated that the shutdown initiative originated from the Shanghai Gold Exchange itself, which decided to formally end this category of bank-agency services for retail investors.

According to insiders, once the Shanghai Gold Exchange established its decision to terminate the agency arrangement, client purchases through banks were immediately halted. Since then, banks have been steadily working to clear outstanding positions. The source added that Everbright is actually among the later institutions to stop the service, as many other lenders had already discontinued it earlier in the year.

Everbright's announcement detailed the specific timeline: after market close and clearing on October 19, 2026, the bank will close trading permissions for the Shanghai Gold Exchange precious metals agency business across mobile banking, online banking, and other channels. Following the closure, clients holding positions will face restrictions on liquidation and selling operations. The affected contract varieties include Au99.99, Au100g, iAu99.99, iAu100g, Ag(T+D), among others.

Clients currently holding physical stock or deferred positions are urged to complete sell-offs, deferred position closures, fund transfers, and contract termination through the bank's mobile or online channels before October 19 to avoid inconvenience. For clients who have signed contracts but hold no positions, the bank will dissolve the agency relationship. Those with residual funds in margin accounts but no positions will have their funds returned to their designated Everbright accounts after contract termination.

Importantly, physical gold distribution services and gold accumulation products remain unaffected and will continue to operate normally. Industry data shows that in December 2025, member self-operated transactions accounted for 93.56% of total trading volume on the Shanghai Gold Exchange, while member-agency transactions represented 6.44%. By August 2026, self-operated volume had risen to 94.89%, while agency volume fell to 5.11%, a decline of 1.33 percentage points over that period.

Preliminary statistics indicate that over 10 banks have already announced plans to cease or have already ceased this business this year, including Postal Savings Bank of China, Ping An Bank, China Guangfa Bank, China Merchants Bank, Bank of Communications, ICBC, China Construction Bank, Bank of China, Hua Xia Bank, Shanghai Pudong Development Bank, and China Everbright Bank Company Limited.

Shanghai Pudong Development Bank, for instance, will suspend its agency service after September 25, 2026, closing trading permissions across mobile banking, online banking, and physical branch counters. UnionPay's announcement mirrors the operational risks involved, as margin-based trading amplifies both potential gains and losses.

To illustrate the risk mechanism: if a client opens a long position on 100 lots of the Ag(T+D) silver deferred contract through a bank, with a margin ratio set at 66.01% and a contract price of 23,000 yuan per lot, the total trading amount would be 2,300,000 yuan, requiring initial margin of approximately 1,518,230 yuan. If market prices decline and daily mark-to-market settlement depletes available funds, the bank will demand additional margin once risk indicators are triggered. Should losses erode the margin to insufficient levels, the bank retains the right to force-liquidate positions. If liquidation proceeds fail to cover the client's losses, applicable fees, and other charges, the bank may pursue further recovery.

Throughout this year, banks have issued frequent risk warnings regarding precious metals business. In mid-June, Shanghai Pudong Development Bank cautioned that precious metals prices were experiencing significant volatility with elevated market risk, urging clients to strengthen risk awareness, monitor account positions, manage margins and exposure proactively, and execute timely profit-taking or stop-loss strategies. The bank also reminded clients that insufficient margin could trigger forced liquidation, potentially resulting in investment losses.