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Shanghai Gold Exchange tells banks to wind down retail leveraged metals trading
At least a dozen Chinese lenders are preparing to exit retail leveraged precious-metals trading after the Shanghai Gold Exchange directed them to pull back, with China Everbright Bank the latest to set an exit date.
The withdrawal covers margin-based speculation in gold and silver contracts, in which retail investors post deposits to bet on price moves without ever taking delivery of physical metal. Banks affected by the shift are steering clients toward fixed-price accumulation plans and outright purchases of bullion instead.
People at two of the lenders, including the Industrial and Commercial Bank of China, the world's largest bank by assets, said the pullback was ordered by the Shanghai Gold Exchange, the country's principal venue for physical precious-metals trading.
The most recent announcement came on Friday, when Beijing-based China Everbright Bank said it would phase out retail leveraged precious-metals trading for gold and silver. The bank set the wind-down for a date still to be determined after October 19.
Shanghai Pudong Development Bank issued a comparable notice earlier this month, adding to the list of lenders preparing to close out the business. At least a dozen institutions in total intend to exit.
The retreat is taking place against sharp swings in international gold prices.