Shanghai Gold Exchange pushes more Chinese banks to end retail leverage trading

At least a dozen Chinese banks intend to wind down retail leveraged precious-metals trading – a practice in which everyday investors post margin deposits to speculate on gold and silver contracts without owning the physical metal.

The retreat comes amid sharp swings in international gold prices. Sources at two banks, including the Industrial and Commercial Bank of China – the world’s largest lender by assets – said that this round of withdrawals was mandated by the Shanghai Gold Exchange, China’s main platform for physical precious-metals trading.

The latest move came on Friday, when Beijing-based China Everbright Bank said it would phase out retail leveraged precious-metals trading for gold and silver on a to-be-determined date after October 19. Earlier this month, Shanghai Pudong Development Bank put out a comparable notice.