Major financial institutions and exchanges in mainland China are making moves or comments to curb investor appetite for precious metals, which have been soaring to new highs.
Following the recent rise in precious metal prices, regulators and major banks in the mainland have rushed to curb demand. Three of China’s «Big Four» banks have reportedly cut off new business in the area.
Industrial and Commercial Bank of China said last week that it banned clients from opening new trading positions for platinum, palladium and index products linked to precious metals from Friday onwards, according to a «Reuters» report, in response to «violent price volatility» and «the need to control risks.»
The Agricultural Bank of China said it had recently suspended new gold-related businesses while Bank of China said it halted new account openings for platinum and palladium trading.
Exchange Warnings
In addition to banks, exchanges also issued warnings and underlined the potential for further moves.
The Shanghai Futures Exchange, which trades gold and silver futures contracts, called for greater prudence and rational investing. The Shanghai Gold Exchange also warned about the risk of high gold and silver holdings, adding that it would take measures to control risk for investor protection if warranted.
Fuelled by growing uncertainty from concerns about a coronavirus resurgence, safe have demand has been on the rise leading precious metals to reach new highs. Gold recently neared $2,000 per ounce to break its previous record of $1,921 set in 2011.
