Gold prices spiked above $5,600 an ounce on January 29, 2026, then plunged more than 12% within 30 hours. That wild swing triggered a swift regulatory response, with several of China’s largest banks moving to restrict retail precious metals trading on the Shanghai Gold Exchange (SGE).
The Postal Savings Bank of China (PSBC) had already suspended new individual SGE accounts on January 12, weeks before the volatility peak. Industrial and Commercial Bank of China (ICBC) began cleaning up dormant margin accounts on December 19, 2025. Industrial Bank followed on February 14, shutting down personal online banking channels for precious metals. China Construction Bank (CCB) imposed its own limits. The SGE itself issued risk warnings on February 9, urging member firms to strengthen contingency plans.
The banks cited risks tied to leveraged trading, including margin calls and reputational fallout.
The People’s Bank of China (PBOC) has been on a sustained gold-buying spree, adding to reserves for at least 17 consecutive months into April 2026. The central bank wants gold for its balance sheet-but it does not want retail investors levering up to chase the same trade.
For investors, the immediate effect is limited on-ramps for leveraged gold exposure through traditional Chinese banking channels. That opens the door for tokenized gold products like Paxos Gold (PAXG), which are backed by physical gold, trade around the clock, and carry no margin requirements.
The PBOC’s relentless accumulation underscores the growing status of gold as a reserve asset, a macro theme that also supports demand for Bitcoin and other hard assets.