The precious metals market experiences intense volatility, with multiple banks collectively stepping in to tighten risk controls.

【Source: Global Times】

【Global Times Financial Report】 Recently, the international precious metals market has experienced intense price fluctuations, with risk aversion and speculative risks coexisting. To address market risks and protect investors’ rights, several state-owned banks including ICBC, Agricultural Bank of China, and China Construction Bank have consecutively announced adjustments to the margin requirements for precious metals deferred contracts. This is another collective risk control move within the industry following previous margin increases by some banks.

Multiple major banks intensify actions: margin ratio adjusted to 100%

Recently, China Construction Bank announced that, in response to market changes and to protect investors’ rights, starting from the close of trading on February 27, the bank will adjust the margin requirements for multiple deferred contracts including Au (T+D), mAu (T+D), Au (T+N1), Au (T+N2), NYAuTN06, NYAuTN12, Ag (T+D), raising the ratio from 80% to 100%.

ICBC also issued a notice stating that due to the significant increase in risks in the precious metals market recently, starting from the close of trading on February 27, the bank will adjust the standard trading margin ratio for contracts such as Au (T+D), mAu (T+D), and Ag (T+D) from 80% to 100%, with differentiated margin requirements adjusted uniformly and proportionally.

Agricultural Bank of China took earlier action, having already increased the margin ratio for Au (T+D), mAu (T+D), and Ag (T+D) contracts from 80% to 100% starting from the close of trading on February 26.

It is noteworthy that this is not the first adjustment within the year. For example, Agricultural Bank of China announced on February 4 that the margin ratio for the above contracts was increased from 60% to 80%. In just one month, the margin ratio has experienced two consecutive jumps, rising from 60% to 100%, demonstrating the urgency of risk control measures by banks.

High leverage trading carries high risks; banks aim to “de-leverage”

Precious metals deferred trading is a listed contract on the Shanghai Gold Exchange, characterized by margin trading with leverage effects. An insider from a state-owned bank stated that while this model can reduce capital occupation and improve investment efficiency, it carries significant risks. “Since deferred settlement involves margin leverage trading, it can lead to rapid loss of clients’ principal. Investors need solid fundamental knowledge and strong risk tolerance.”

After this adjustment, with the margin ratio at 100%, the business effectively enters a “full amount trading” state, completely eliminating leverage effects.

Senior investment advisor Yu Xiaoming from Jufeng Investment pointed out that bank precious metals deferred trading is inherently a high-risk investment activity. The recent increase of margin ratios to 100% by multiple banks means the leverage effect is compressed, significantly reducing short-term speculative space. In the current highly volatile market environment, this adjustment, by raising trading capital thresholds, enhances risk control and can effectively prevent forced liquidation risks caused by insufficient margins. In the long term, it helps to eliminate speculative bubbles and guide the precious metals trading market back to rationality.

Regarding the collective increase in margin requirements for precious metals deferred contracts by multiple banks, analysts believe that this move has dual significance: “micro” risk control and “macro” guidance. On one hand, amid intensified international gold price fluctuations, banks are ‘de-leveraging’ to add a ‘safety cushion’ for investors, effectively preventing liquidation risks caused by extreme volatility; on the other hand, this aligns with the Shanghai Gold Exchange’s policy of ‘dual-track regulation,’ aiming to curb high-leverage speculative behaviors and guide the market back to asset allocation fundamentals. This adjustment does not affect low-risk businesses such as physical gold and stored gold, indicating that regulators intend to curb excessive speculation rather than restrict normal consumption. Investors should timely shift their mindset from arbitraging price spreads to long-term value investing. (Wen Xin)