Gold File photo: VCG
International spot gold prices have surpassed $4,000 per ounce this month to record highs, with a year-to-date rise exceeding 53 percent. Amid this background, many Chinese banks have posted risk warnings on their official websites, urging clients to be mindful of intensified price volatility and invest rationally.
The Industrial and Commercial Bank of China (ICBC), Agricultural Bank of China, China Construction Bank (CCB) and Ningbo Bank have adjusted their precious metals-related services. These adjustments involve raising investment thresholds, modifying margin levels and updating circuit breaker rules, primarily affecting gold savings businesses and agency business for precious metals trading on the Shanghai Gold Exchange.
For example, CCB announced on Friday that recent fluctuations in domestic and international precious metals prices have intensified, increasing market risks. “We urge our clients to enhance risk awareness in precious metals business, monitor your holdings and margin balance changes closely, and invest rationally.”
Also on Friday, ICBC released a risk alert regarding precious metals price volatility, noting that factors destabilizing the market have increased recently, leading to significant price swings. It advised clients to monitor market changes, boost their risk awareness, invest rationally based on their financial situation and risk tolerance, appropriately scale their precious metals assets and safeguard their property.
Beyond issuing risk warnings, ICBC has raised the investment threshold for its gold savings business. According to an announcement on Saturday, ICBC adjusted the minimum investment amount for its gold savings businesses from 850 yuan ($119) to 1,000 yuan, while the gram-based starting point remains 1 gram. The bank also pledged to monitor market fluctuations and adjust the minimum investment amount as needed.
The World Gold Council on Sunday stated that the year-to-date rally in gold marks its best annual performance since 1979. In March, international gold prices first broke the $3,000 per ounce mark. In late August, prices gradually rose from about $3,300 per ounce to $4,000, up more than 20 percent.
Year-to-date, the main gold futures contract on the New York Mercantile Exchange has risen more than 51 percent. On Friday, international gold prices surpassed $4,000 per ounce again, with a weekly increase exceeding 2 percent.
Analysts attributed the price hikes to factors such as trade tensions triggered by the US tariffs and global economic uncertainty, which have heightened investors’ risk aversion.
“The gold price surge is primarily driven by increased confidence in the Fed’s interest rate cut cycle, a weakening US dollar and geopolitical uncertainties like the US government shutdown, reflecting a rising demand for defensive assets amid economic and geopolitical instability,” Yang Delong, chief economist at Shenzhen-based First Seafront Fund, told the Global Times on Sunday.
Amid this year’s volatile gold price rally, silver prices have also risen. Silver spot prices on the London market hit $51.239 per ounce, and as of Friday, the price stood at $50.126 per ounce, with a year-to-date increase of 73.53 percent, surpassing gold’s gains.
Analysts suggested that the record silver prices signal a shifting pattern in the precious metals market, potentially influencing a revaluation of silver from an “industrial metal” to a “store of value” asset.
Global Times