Gold price volatility triggers bank risk control upgrades, precious metals business shifts to "dynamic defense"

Ask AI · How do banks balance speculation and long-term investment through dynamic risk control?

[Global Times Consumer Comprehensive Report] On March 25, the spot gold market continued its recent high volatility trend, briefly breaking through the $4600/ounce mark during the day, showcasing a thrilling “roller coaster” market. This is just a snapshot of the recent intense fluctuations in the precious metals market. On March 23, spot gold fell below the key thresholds of $4500, $4400, $4300, and $4100/ounce in succession, dropping as much as 9.75% in a single day, falling below $4100/ounce for the first time since November 2025, erasing all gains made this year, and leaving market participants in a cold sweat. In response to the short-term volatility risks accumulating in the precious metals market, domestic banks have quickly reacted, upgrading their risk control on precious metals business from risk warnings to rule adjustments.

Intensive Warnings, State-owned Banks and Joint-stock Banks Collaborate to Warn of Risks

Faced with market uncertainty, the first line of defense from bank channels has been rapidly established. Since this week, major state-owned banks including Bank of China, Agricultural Bank of China, Industrial and Commercial Bank of China, China Construction Bank, and Bank of Communications, as well as joint-stock banks such as China Minsheng Bank and China Merchants Bank, have densely issued market risk warning announcements regarding precious metals business.

These banks pointed out in their announcements that the prices of precious metals both domestically and internationally have been highly volatile recently, with significantly increased uncertainty factors affecting market trends, leading to heightened market risks. The banks specifically remind investors to fully and prudently assess their risk tolerance, comprehensively consider their personal financial situation, and conduct precious metals trading business in a stable manner. Keywords such as “rational investment mindset,” “reasonable control of position size,” and “preventing market volatility risks” frequently appear in the announcements, aiming to guide investors to remain calm amidst the fervent market conditions and avoid severe losses caused by blindly chasing up and down.

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Rule Restructuring, Quota Management Raises Trading Thresholds

In addition to verbal risk warnings, several banks have taken further steps by adjusting trading rules for accumulated gold and other precious metals businesses, making substantial business adjustments to cool down trading enthusiasm.

Regarding quota management, China Construction Bank and Industrial and Commercial Bank have explicitly stated that they will implement quota management for accumulated gold purchases under certain conditions, aiming to control the total volume of precious metals trading and prevent single investors from overly concentrating on a single high-risk asset. In terms of trading costs, China Merchants Bank and Jiangsu Bank have chosen to adjust their fee structures, increasing short-term trading costs to curb speculative behavior.

Specifically, China Merchants Bank announced that the trading spread for gold account business at the same quoted point will be adjusted to 5 yuan/gram, with the buying side spread increased by 2 yuan/gram, while the selling side remains unchanged. The adjusted spread scheme is expected to run until June 27, after which a new round of adjustments will take place. Jiangsu Bank has also fine-tuned the fee schedule for its gold accumulation business, setting the benchmark fee standard at 1.5 yuan/gram and implementing differentiated discount pricing based on different time periods. Industry analysts believe that by raising the buying costs or adjusting spreads, banks aim to increase the threshold for short-term speculative trading, forcing investors to lean towards long-term holding rather than frequent trading.

Logic Shift, Moving from Static Defense to Dynamic Adjustment

The risk control measures introduced by banks are not a simple temporary response but represent a deep change in risk control logic. Industry insiders point out that in the past, banks’ risk control for precious metals business primarily focused on “static defense,” meaning passive restrictions when risks occurred. The recent flexible adjustments to spreads and quotas mark a shift towards a “dynamic adjustment” strategy.

This dynamic adjustment is reflected in the real-time optimization of business parameters based on market volatility. For example, China Merchants Bank has set a clear timetable and range for spread adjustments, while Jiangsu Bank has implemented a phased rate strategy. This indicates that banks are establishing a more sensitive risk response mechanism, which can effectively cope with the shocks brought by short-term extreme market conditions and guide investors from speculating on short-term price differences to reasonable long-term asset allocation. This is not only a necessary move to protect investors’ interests but also reflects banks’ enhancement of active management capabilities under the new asset management regulations.

Industry analysts note that although short-term gold price volatility has intensified, this has not shaken institutions’ confidence in the long-term allocation value of gold. The World Gold Council (WGC) recently reported that the gold market is currently in a clear “wait-and-see mode,” with short-term trends significantly influenced by geopolitical situations in the absence of important macroeconomic data guidance. The macro team at CITIC Construction Investment also believes that the bullish logic for gold in the medium to long term has not been undermined, and short-term conditions need to wait for liquidity shocks to subside. For investors, the shift in banks’ risk control thinking is an important signal, reminding the market and investors that while enjoying the value of precious metals asset allocation, they must maintain respect for high volatility risks and align with banks’ direction of “de-leveraging and reducing speculation,” returning to the essence of asset allocation. (Wen Xin)