Gold prices experience short-term high volatility; banks shift risk control strategies toward dynamic adjustments

Originally from: Securities Times

On March 25, spot gold continued its recent high volatility, briefly breaking above the $4,600 per ounce level during trading.

Reviewing the market on March 23, spot gold repeatedly fell below the key levels of $4,500, $4,400, $4,300, $4,200, and $4,100 per ounce, for the first time since November 2025, dropping below $4,100 per ounce. During the day, it plunged by as much as 9.75%, erasing all gains made earlier this year.

In response to the short-term volatility risks accumulating in the precious metals market, domestic banks have quickly adjusted their risk control mechanisms. According to a review by reporters, this week, state-owned banks such as 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 like China Minsheng Bank and China Merchants Bank, have issued notices warning investors about market risks in precious metals businesses.

The notices stated that recent domestic and international precious metal prices have experienced intense fluctuations, with significant increases in uncertainty factors, elevating market risks. Customers are especially advised to fully and cautiously assess their risk tolerance, consider their financial situation comprehensively, and conduct precious metals trading prudently, maintaining a rational investment mindset. Additionally, they should closely monitor market changes, reasonably control their positions, and effectively prevent market volatility risks.

Besides issuing risk warning notices, many banks are also adjusting trading rules for stored gold and other precious metals. For example, China Construction Bank and ICBC announced that under certain conditions, they will implement quota management for gold purchase deposits to control the total volume of precious metal transactions; China Merchants Bank and Jiangsu Bank are adjusting trading fees to increase short-term trading costs.

Industry insiders pointed out that these measures represent a proactive shift in banks’ risk control approach for precious metals from the previous “static defense” to “dynamic adjustment,” guiding investors toward reasonable long-term asset allocation.

For instance, China Merchants Bank has adjusted the bid-ask spread for gold account transactions at the same quote time to 5 yuan per gram, with the buy side spread increasing by 2 yuan per gram while the sell side remains unchanged. This adjusted spread plan is expected to run until June 27; starting from June 29, the bid-ask spread for both buy and sell sides of the same quote in the bank’s gold account business will be adjusted to 2.5 yuan per gram.

Jiangsu Bank, from January 1, 2026, will also adjust its fee schedule for gold deposit services. The base fee for buying, redeeming, or exchanging physical gold through this bank will be 1.5 yuan per gram; from January 1 to March 31, 2026, a promotional rate of 1.2 yuan per gram will be applied (compared to 1 yuan per gram in 2025); from April 1 to December 31, 2026, the promotional rate will be 1.4 yuan per gram.

Looking ahead, many institutions remain optimistic about the long-term strategic value of gold allocation.

The World Gold Council (WGC) recently released a market report indicating that the gold market is currently in a clear “wait-and-see mode.” Due to the lack of significant macroeconomic data guidance this week, short-term gold trends are expected to closely follow daily developments in the Middle East situation. The navigation status of the Strait of Hormuz has become a key variable influencing current market sentiment. Nevertheless, institutional investors’ optimism about the long-term strategic value of gold remains unchanged.

CITIC Construction Investment’s macro team published a research report stating that the medium- to long-term bullish logic for gold has not been undermined, but short-term liquidity shocks need to subside before a sustained rally.

Editor: Zhang Yao

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