Gold Price Fluctuates, Banks Raise Gold Trading Thresholds Again

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Source: Beijing Business Today

Since late March, the gold market has moved away from a steady upward trend, experiencing fluctuations and corrections. International gold prices saw their weekly range reach a recent high, temporarily erasing the full-year gains for 2026. Facing sharp price volatility and increasing liquidity pressures, on March 24, some banks adjusted their precious metals trading rules by widening spreads and optimizing quote modes to raise trading thresholds. Industry insiders say that expanding spreads is a risk rebalancing measure to cope with market volatility, covering hedging and operational costs, and easing liquidity management pressures caused by high-frequency trading. For investors, during periods of high gold price volatility, it’s advisable to avoid high-frequency speculation, reduce trading frequency, and view gold as a medium- to long-term safe haven asset in asset allocation, with proper position control to mitigate short-term market risks.

Banks Raise Storage Gold Fees

Recently, gold prices have experienced significant fluctuations, increasing trading risks and liquidity pressures. On March 24, it was noted that some banks raised trading thresholds to hedge against price swings and curb short-term speculation.

According to China Merchants Bank, this year, gold prices have become more volatile. To meet market needs and ensure smooth trading and operational costs, the bank adjusted the buy-sell spread for gold account transactions starting at 9:10 a.m. on March 23, increasing it from 3 yuan per gram to 5 yuan per gram. The spread for gold account purchases increased by 2 yuan/gram, while the sell spread remained unchanged.

A customer service representative from China Merchants Bank explained that this spread adjustment is expected to last until June 27. Starting June 29, the buy and sell spreads will be adjusted to 2.5 yuan/gram each. This means future trading rules will be more balanced, with both buy and sell prices incurring a fee of 2.5 yuan/gram, maintaining a total spread of 5 yuan. For example, if the current base quote for gold is 980 yuan/gram, before the adjustment, the buy price was 983 yuan/gram with a 3 yuan spread. After the adjustment, the buy price will be 985 yuan/gram with a 5 yuan spread, increasing the cost for investors buying gold.

Raising precious metals trading spreads is not an isolated case. Recently, Jiangsu Bank also announced similar adjustments, citing increased gold price volatility and market liquidity risks. To keep trading durations stable, the bank will modify quote modes and trading hours as appropriate. The bank’s mobile app shows that the current buy-sell spread for personal gold savings is 2.4 yuan/gram. Since 8:00 p.m. on March 19, the bank has been adjusting the buy-sell spread based on international and domestic gold price fluctuations and market liquidity. The spread is variable and, beyond the transaction fees, may include additional spreads caused by market volatility and liquidity, which can result in spreads exceeding the bank’s fees.

For example, from January 1 to March 31, Jiangsu Bank charged a total buy-sell fee of 2.4 yuan/gram; from April 1 to December 31, the fee is 2.8 yuan/gram. Any additional spread beyond the bank’s fees is due to market factors. Jiangsu Bank states that due to gold market fluctuations and liquidity, the bank reserves the right to adjust buy-sell spreads in real-time without prior notice.

Regarding banks raising gold trading spreads, industry analyst Gao Zhengyang commented that this is a risk rebalancing measure in response to market changes. On one hand, recent sharp gold price swings lead banks to widen spreads to cover risks and hedging costs. On the other hand, if client trading activity increases or short-term speculation intensifies, liquidity management risks also rise, prompting spread increases to curb market speculation.

Investors Should Avoid High-Frequency Trading

The trading spread is the difference between the bank’s buy and sell prices, representing the actual transaction cost for gold account and savings products. A survey of several banks shows significant differences in spreads: Bank of China’s spread is 14.6 yuan/gram, China Construction Bank’s is 6 yuan/gram, and China Minsheng Bank’s is 3 yuan/gram.

These differences mainly reflect each bank’s assessment of market risk and operational costs. A banking professional explained that during stable, liquid markets, spreads tend to be low to attract investors. When prices fluctuate sharply and uncertainty rises, banks widen spreads to hedge against exposure and cover costs.

For investors, higher spreads mean increased transaction costs. A long-term gold account holder with a two-year position said they initially planned to buy more during dips, but after the spread widened, costs increased significantly, leading them to pause short-term trades and wait. Some long-term investors understand, believing that if they hold long-term and trade infrequently, the impact on selling is minimal, though short-term buying costs are higher.

Since late March, gold markets have shifted from a previous steady rise to increased volatility and corrections. Influenced by hawkish Fed signals and rising inflation expectations, international gold prices have repeatedly fallen below key levels, with weekly fluctuations reaching recent highs, temporarily erasing the 2026 annual gains. As of 6:50 p.m. on March 24, spot gold was at $4,419.92 per ounce, up 0.29% for the day.

Gao Zhengyang noted that the recent volatility is mainly driven by rising oil prices boosting inflation expectations, combined with cooling expectations of Fed rate cuts and a strengthening dollar, which pressure gold prices. Ongoing geopolitical conflicts also increase asset volatility globally. After a long upward trend, some market participants may sell gold to improve liquidity, further amplifying price swings. He advised investors to pay close attention to how rising trading costs erode returns. Widening spreads increase entry costs and immediate unrealized losses, raising the break-even point for short-term trades. In volatile markets, frequent stop-loss actions and ongoing capital losses are common. Therefore, investors should abandon high-frequency trading, reduce trading frequency, and view gold as a medium- to long-term risk diversification tool within their asset allocation, with proper position management.