Several banks serving as agents for Shanghai Gold Exchange personal precious-metals deferred contracts have raised margin requirements to levels that now exceed the notional value of the trade. The sharpest confirmed move came from China Guangfa Bank, which lifted margin requirements for both gold and silver deferred contracts from 100% to 140%, effective after settlement on June 22.
That means a trader seeking exposure to 100 yuan of a covered contract must now post 140 yuan of collateral.
Bank of China also tightened its rules, saying it would raise the customer margin ratio on individual gold deferred contracts from 99.9% to 120% and on individual silver deferred contracts from 99.96% to 119.91%, effective after settlement on June 24. The bank said the change was based on precious-metals risk management and business needs.
Huaxia Bank made an even larger proportional adjustment on some products. It said gold deferred contracts would move from 35% to 120%, while silver would rise from 42% to 120%, effective after the June 22 close. Huaxia cited recent precious-metals volatility and market-risk prevention.
Sponsored · Silver47 Exploration Inc.
The immediate effect is a retail deleveraging mechanism. Shanghai Gold Exchange explains margin trading as a system where participants must maintain sufficient margin.
The timing matters. Spot gold fell 1.4% to $4,049.44 per ounce on June 24, while August US gold futures dropped nearly 2% to $4,066.70, according to Reuters. Silver also declined 2.5% on the same day.
China’s physical gold market has also cooled. Reuters reported last week that Chinese gold demand slowed and domestic prices flipped to a $4 to $8 per ounce discount to global spot prices, reversing the prior week’s premium.
Guangfa’s move goes further than a margin reset. Chinese financial media Sina reported that the bank also plans to fully stop its agency personal Shanghai Gold Exchange precious-metals trading business by the end of June. The same reports said customers who had not closed positions or sold holdings by June 25 could face forced processing by June 30 under the bank’s personal precious-metals agreement.
The broader pattern is not isolated to three banks. Chinese state media-linked reporting said multiple banks had already moved in stages earlier this year, including increases by large banks from 80% to 100% in February, from 100% to 120% in early June, and in some cases from 120% to 140% later in June.
The strategic tension is that Chinese households have treated gold as a store of value during volatile markets, but the banking system is now limiting one of the most aggressive ways to express that trade. The gold trade is still open but the easy leverage is getting nuked.
