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

Securities Times reporter Huang Yulin

On March 25, spot gold price action continued the high-volatility characteristics seen recently, and during the trading day it briefly rose above the $4,600 per ounce mark.

Looking back at the March 23 market, spot gold repeatedly fell below the $4,500, $4,400, $4,300, $4,200, and $4,100 per-ounce thresholds during the day. It dropped to below $4,100 per ounce for the first time since November 2025, and in the course of the day it tumbled 9.75% at one point, wiping out all gains for the year.

In response to the short-term volatility risks accumulating in the precious metals market, domestic banks have also given a rapid reaction in their risk-control mechanisms. According to a review by Securities Times reporter, this week, major 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 such as China Minsheng Bank and China Merchants Bank, have all issued frequent announcements to remind investors of market risks associated with precious-metals business.

The relevant announcements mentioned above state that, in recent times, the prices of precious metals at home and abroad have fluctuated sharply, with a significant increase in uncertainty factors and an elevated market risk. They especially remind customers to thoroughly and prudently assess their own risk tolerance, carry out precious-metals trading business in a steady manner by taking into account their financial situation, and maintain a rational investment mindset. At the same time, they need to closely monitor changes in market conditions, reasonably control position sizes, and effectively guard against risks arising from market volatility.

In addition to issuing risk-warning announcements, many banks have also moved to adjust trading rules for precious-metals businesses such as accumulated gold holdings. Among them, China Construction Bank and Industrial and Commercial Bank of China said that under certain conditions, they will implement limit management for purchases of accumulated gold to control the total volume of precious-metals trading; China Merchants Bank and Jiangsu Bank, meanwhile, have started adjusting transaction fees, increasing the cost of short-term trading.

Insiders noted that the above measures reflect banks proactively shifting their precious-metals business risk-control thinking from the former “static defense” to “dynamic adjustments,” guiding investors to make reasonable long-term asset allocation.

For example, China Merchants Bank adjusted the buy-sell transaction spread for its gold account business at the same quotation time point to 5 yuan per gram. Specifically, the spread on the buy direction increased by 2 yuan per gram, while the spread on the sell direction remained unchanged. The adjusted spread scheme is expected to run until June 27. Starting from the opening of trading on June 29, the buy-sell spread on both sides for the gold account business at the same quotation time point will be adjusted to 2.5 yuan per gram, respectively.

Jiangsu Bank, meanwhile, starting January 1, 2026, adjusted its pricing schedule for fees related to gold accumulated holdings. For customers handling gold accumulated purchase, redemption, and physical gold exchange business with the bank, the benchmark fee rate is 1.5 yuan per gram. From January 1, 2026 to March 31, 2026, the preferential fee schedule of 1.2 yuan per gram will apply (1 yuan per gram in 2025). From April 1, 2026 to December 31, 2026, the preferential fee schedule of 1.4 yuan per gram will apply.

Looking ahead, multiple institutions still view gold’s long-term strategic allocation value positively.

The World Gold Council (WGC) recently released an updated market report stating that the gold market is currently in a clearly defined “wait-and-see mode.” Since this week lacks guidance from major macroeconomic data, the report expects gold’s short-term price action to closely track the day-to-day developments of the situation in the Middle East. The navigational status of the Strait of Hormuz has become a key variable driving current market sentiment. Even so, institutional investors’ optimistic stance on gold’s long-term strategic allocation value remains unchanged.

A research report released by CITIC Securities’ investment banking macro team said that the logic for a bullish outlook on gold in the medium and long term has not been broken, but in the short term it needs to wait for liquidity shocks to subside.

(Editor: Qian Xiaorui)

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