Chinese banks no longer open new gold accounts

Chinese banks to open from tomorrow No new accounts more to trade gold, silver, and other precious metals. Banks cite increased volatility in the market as the main reason for this decision. The Industrial and Commercial Bank of China (ICBC) writes on its website that it will not open any new accounts from Saturday. This applies to both over the counter (OTC) transactions as well as on online and mobile banking.

"Due to the global epidemic and the international political and economic situation, international and domestic precious metals prices remain volatile. Market risks and uncertainties are also increasing," ICBC reports. The Bank of Communications, the China Construction Bank, the China Merchants Bank and the Agricultural Bank of China will also stop accepting new accounts for trading precious metals from Saturday. In addition, the banks will no longer offer investment products related to the Shanghai Gold Exchange.

Banks no longer open new accounts

The banks are warning investors about volatility in the market. They also advise clients to look carefully at the risks and to act carefully and rationally. A remarkable statement, because volatility is not exceptional for the precious metals market. It is also striking that nothing will change for customers who already have a precious metals account, who can continue to trade as usual. However, the banks are no longer opening accounts to serve new customers. It is not clear how long this new measure will last.

The Bank of China and the Bank of Communications warned in early November of restrictions on trading in precious metals and currencies if the US presidential election led to more volatility. Since then, volatility in the financial markets has indeed increased, but that is more due to news about corona vaccines. Investors are less pessimistic about the economy due to the development of new vaccines. As a result, stock prices have skyrocketed over the past two weeks, while precious metals have fallen in price. The price drop in recent weeks is a reason for many savers and consumers in China to buy precious metals.

China is one of the largest gold markets in the world, but due to the corona crisis and the high Gold price the demand for gold in China has been much lower than usual this year. As a result, the gold price on the Chinese market earlier this year was even bearing than on the international market. Now that the prices of precious metals are a bit lower again, many Chinese investors are getting back into the market.

This contribution was made from Geotrendlines