Chinese banks to suspend new precious metal account openings

(Adds Bank of China statement in paragraph 4)

SHANGHAI/BEIJING, Nov 27 (Reuters) – Chinese banks including major state-owned players announced on Friday they will suspend the opening of new accounts for their precious metal investment products from Saturday amid increased volatility in global and domestic precious metal prices.

Industrial and Commercial Bank of China (ICBC) said in a notice on its website it would suspend the opening of new individual gold, silver and other precious metal investment trading accounts from Saturday via all channels, including over-the-counter and online or mobile banking.

“Affected by the global epidemic situation and the international political and economic situation, international and domestic precious metals price continued to show volatility, market risks and uncertainties increased,” ICBC said.

Bank of China later said in a statement it would suspend services related to its Shanghai Gold Exchange business for individuals from Saturday.

Bank of Communications and China Construction Bank also suspended new account openings for their precious metal trading and investment products linked to the Shanghai Gold Exchange from noon on Saturday and from Monday, respectively.

The banks warned investors to pay attention to market and volatility risks and to manage trading and conduct investment transactions prudently and rationally, according to statements released on Friday, but added that trading for customers with existing accounts would not be affected.

China Merchants Bank and Agricultural Bank of China also issued similar warnings and will suspend new account applications from Saturday.

Spot gold prices began sliding after Nov. 9 as news of the first successful, late-stage novel coronavirus vaccine trial prompted investors to dump safe-haven bullion and flock to riskier assets. They are down nearly 4% this month.

Bank of China and Bank of Communications in early November had already warned investors they could restrict trading of their precious metal and foreign exchange products if the U.S. presidential election on Nov. 3 fueled market volatility. (Reporting by Emily Chow and Zoey Zhang; additional reporting by Tom Daly; Editing by Robert Birsel, Kirsten Donovan/Emelia Sithole-Matarise)


Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.