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

Securities Times Reporter Huang Yulin

On March 25, the spot gold trend continued its recent characteristic of high volatility, briefly breaking the $4600/ounce mark during the session.

Reviewing the market on March 23, spot gold consecutively fell below the significant levels of $4500, $4400, $4300, $4200, and $4100 per ounce, marking its first drop below $4100 per ounce since November 2025, with a daily decline of up to 9.75%, erasing all gains made this year.

In response to the short-term accumulated volatility risks in the precious metals market, domestic banks have quickly reacted with adjustments to their risk control mechanisms. According to Securities Times 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 announcements to inform investors of the market risks associated with precious metals business.

The relevant announcements stated that recent domestic and international precious metals prices have been extremely volatile, with significant increases in uncertainty factors and heightened market risks, particularly reminding clients to fully and prudently assess their risk tolerance, comprehensively consider their financial situation, and conduct precious metals trading business in a stable manner while maintaining a rational investment mindset. Additionally, clients are advised to closely monitor market changes, reasonably control their position sizes, and effectively prevent market volatility risks.

In addition to issuing risk warning announcements, several banks have also begun to adjust the trading rules for precious metals businesses such as accumulated gold. Among them, China Construction Bank and Industrial and Commercial Bank of China have indicated that under certain conditions, they will implement quota management for accumulated gold purchases to control the total volume of precious metals trading; China Merchants Bank and Jiangsu Bank are adjusting trading fees to increase the costs of short-term trading.

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

For instance, China Merchants Bank has adjusted the trading spread for buying and selling transactions under the same price quote for gold accounts to 5 yuan/gram, with an increase of 2 yuan/gram on the buying side while keeping the selling side spread unchanged. The revised spread plan is expected to run until June 27; starting from the market opening on June 29, the bid-ask spreads for the same price quote in the gold account business will be adjusted to 2.5 yuan/gram.

Jiangsu Bank will adjust its fee schedule for gold accumulation business starting January 1, 2026. The standard fee for purchasing, redeeming, and exchanging physical gold in this bank will be 1.5 yuan/gram; from January 1 to March 31, 2026, the preferential fee will be 1.2 yuan/gram (1 yuan/gram in 2025); from April 1 to December 31, 2026, the preferential fee will be 1.4 yuan/gram.

Looking ahead, several institutions continue to be optimistic about the long-term strategic allocation value of gold.

The World Gold Council (WGC) recently released its latest 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, the short-term trend of gold is expected to closely follow the daily developments in the Middle East situation. The navigational status of the Strait of Hormuz has become a key variable affecting current market sentiment. Nevertheless, institutional investors’ optimistic attitude towards the long-term strategic allocation value of gold remains unchanged.

The macro team of CITIC Securities published a research report stating that the medium- to long-term bullish logic for gold has not been undermined, but in the short term, it is necessary to wait for the liquidity shock to subside.