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| FILE PHOTO: A sales assistant packs a 1000 gram gold bar for a customer as an investment at Caibai Jewelry store, in Beijing, China, August 6, 2019. REUTERS/Jason Lee |
SHANGHAI (Reuters) — Chinese regulators and major banks are rushing to curb precious metal trading by domestic investors to temper speculation that some fear could cause a repeat of this year’s oil trading mishaps.
The scramble to limit risks comes as gold prices hit record highs this week, spurred by investors hunting for safe haven assets in markets rattled by worries of rising coronavirus cases, lofty equity valuations and a falling U.S. dollar.
A deepening rift between the United States and China has also become a factor drawing mainland investors to gold.
Industrial and Commercial Bank of China (ICBC), the country’s biggest lender, said on Wednesday it would bar its clients from opening new trading positions for platinum, palladium and index products linked to precious metal from Friday. That directive, according to the lender’s customer service department, was in response to “violent price volatility” and “the need to control risks.”
Agricultural Bank of China said it had recently suspended new businesses related to gold, while Bank of China said it halted new account openings for platinum and palladium trading.
The Shanghai Gold Exchange said on Tuesday gold and silver holdings were high, and it would take risk-control measures if warranted to protect investors.
The Shanghai Futures Exchange, where gold and silver futures contracts are traded, also urged its members to strengthen risk-management efforts and invest rationally.
Source: Reuters
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