On 25 September the South China Morning Post reported that the Shanghai Gold Exchange is pushing more Chinese banks to wind down retail leveraged trading in gold and silver. At least a dozen lenders are now involved, including ICBC, China Everbright Bank and Shanghai Pudong Development Bank. Everbright says it will phase out the service after 19 October; Pudong issued a similar notice earlier in September.
It is easy to read that headline as China cooling on gold. The details say the opposite. The banks are not telling clients to leave precious metals. They are redirecting them — toward fixed-price accumulation plans and physical purchases. What is being removed is not exposure to gold. It is leverage on gold.
What is actually being closed
The products in question are the Shanghai Gold Exchange’s deferred-settlement contracts — Au(T+D), mAu(T+D) and Ag(T+D) — which banks offered to retail customers as agents. They let an investor take a position in gold or silver on margin and roll it forward, without ever taking delivery of metal. In other words: price exposure, amplified, with no bar at the end of it.
This is the second wave. In June, ICBC, Postal Savings Bank of China, Ping An Bank and China Guangfa Bank announced they were suspending individual trading tied to the exchange, with ICBC setting a 24 July exit. According to BullionStar’s analysis, banks had spent the preceding months raising margin requirements to 120–140% of contract value — a level at which the leverage is gone in all but name — before closing the products altogether.
Why now
The stated reason is risk management after violent price swings. Gold fell almost 30% from its January peak and broke below $4,000 an ounce in June, the kind of move that turns margin accounts into forced sellers. Regulators have seen that film before: in 2020 a bank-sold crude oil product left Chinese retail investors with losses larger than their deposits when US oil futures went negative.
Meanwhile the physical side has been doing the opposite of retreating. China’s gold imports through August passed 1,000 tonnes, already more than in all of 2025, and the People’s Bank of China has kept adding to its reserves month after month. Gold itself has recovered to around $4,370 an ounce in late September.
Price exposure is not ownership
This is the distinction the whole episode turns on, and it applies well beyond China. A leveraged contract and a bar in a vault can track the same price, yet they are different decisions with different ways of failing. The leveraged position fails on path: a 20% drawdown can close it out before the thesis ever has time to be right. The physical position fails on cost and access: premiums, storage, liquidity. An ETF, a miner or a futures account each sits somewhere else again on that map.
Beijing has effectively made that choice on behalf of its retail investors: patient, fully funded accumulation over fast, borrowed exposure. From a market-structure view, that also changes who holds Chinese retail gold — fewer holders who must sell into a drop, more who can sit through one. Whether you agree with the policy or not, it is a clear statement about which kind of holder a system wants when prices get volatile.
Write it down
Look at your own precious-metals position and name the instrument precisely — not “gold,” but physical bars, an allocated vault account, an ETF, a mining share, a futures or CFD position. Then write down one line: what would a 30% fall do to this particular instrument, and would you still own it afterwards? If the answer depends on a margin call, you are holding something closer to what China just closed than to what it is encouraging.
Choosing the instrument is a chapter of its own
The Gold Investor compares physical ownership, ETFs, mining stocks and futures, and how risk management differs for each. Read the free preview in your language, and subscribers get the full book for €35 instead of €38.
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Sources
- South China Morning Post, “Shanghai Gold Exchange pushes more Chinese banks to end retail leverage trading”, 25 September 2026.
- South China Morning Post, “Major Chinese banks suspend individual trading on Shanghai Gold Exchange amid volatility”, 25 June 2026.
- BullionStar, “Deep Dive: China’s Exit from Retail Paper Gold Trading”.
- Yahoo Finance, “Gold price today, Tuesday, September 22, 2026: Gold prices holding as Chinese gold imports set record”.
Educational content to support your own research and decisions. Not financial advice.