Banks "Besieged" in the Precious Metals Storm: Major Banks Build Walls, Small Banks Find Paths

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Lawyer Wang Zhi (pseudonym), who is about to receive his year-end bonus, felt an indescribable restlessness amidst the chill of early February. It was the lingering heat from the drastic gold price fluctuations in the market—an embodiment of wealth anxiety at a specific moment.

On February 2, the global precious metals market experienced a major correction. After briefly breaking through the $5,500/oz mark, spot gold reversed course in just a few trading days, with a cumulative multi-day drop nearing the 20% range.

Despite the widespread panic about an “epic crash,” for Wang Zhi, volatility is a magnet—he neither wants to be entirely absent from this gold fever nor feels easy about the violent swings at these high levels. In the end, he pauses to examine the gold-linked structured deposits launched by several major banks.

Wang Zhi is not alone in this choice.

As a wave of deposit maturities coincides with the year-end bonus season and the afterglow of the gold rally remains, various financial products linked to precious metals have become banks’ “winning move” to attract customers and gather deposits.

In this nationwide gold rush, the attitudes of large and small banks toward gold business are showing subtle divergence:

On one side, national commercial banks are working to “cool down” the craze, building firewalls by raising entry thresholds and reinforcing risk ratings;

On the other side, smaller banks are still “heating up,” trying to share in the feast through technical and channel gaps.

Big Banks “Build Walls”

With gold prices at elevated levels and volatility increasing, state-owned and leading joint-stock banks are quietly launching a “move away from retail investors.”

This strategy doesn't mean rejecting clients—it’s about raising the admission bar and designing risk-hedged products, aiming to separate depositors who can't endure extreme swings from high-risk speculative behavior.

From the end of 2025 to the start of 2026, major commercial banks have all raised the minimums for regular gold accumulation plans:

As of February 2, China Construction Bank raised the starting amount for individual gold accumulation business (including daily average and customizable daily plans) to 1,500 yuan. Industrial and Commercial Bank of China (ICBC) raised the starting amount for gold accumulation to 1,100 yuan.

Among joint-stock banks, Citic Bank also raised the minimum amount for scheduled gold accumulation plans to 1,500 yuan.

This adjustment is not solely a result of price increases and valuation changes, but mainly because big banks recognize that in a market where a single day's movement can wipe out a year's deposit returns, low-amount participants are much more sensitive to risk and filtering out “small and frequent” speculators is necessary.

Raising hard thresholds goes hand-in-hand with stricter risk ratings.

Since mid-January, ICBC raised the risk admission level for gold accumulation business to C3 (“balanced type”) and above, and clearly stipulated that only investors “who can accept asset value fluctuations and even some investment losses” are eligible to participate.

Agricultural Bank of China requires personal clients signing up, buying into, or initiating periodic investments in its “Gold Pass” gold accumulation business (including No. 1 and No. 2) to obtain “cautious type” or above in risk assessment results.

While defending against risks, national banks are turning toward structured products. Compared to letting retail investors fight it out in the secondary market, big banks prefer to bundle gold volatility into these standardized “bounded gain/loss” products.

Specifically, Bank of Communications launched the “Steady Returns” series of principal-protected, high-yield, gold-linked structured deposits. The underlying asset is the “Shanghai Gold Exchange Gold AU99.99 contract closing price,” with annualized yields ranging from 0.5% to 3.2%.

China Merchants Bank issued several “Touch Gold” series of gold-linked structured deposits, with deposit periods ranging from 7 to 367 days, minimum deposit from 10,000 yuan to a maximum of 300,000 yuan, and expected annual rate of 1% to 1.78%.

Take the “Touch Gold Progressive Bull Shark Fin 181 Days Structured Deposit” from China Merchants Bank as an example:

From a profit mechanism perspective, it isn’t simply a bullish product, but is built on a complex binary options logic.

If during the observation period, the international spot gold price never touches the agreed “knock-out” price (upper limit), and if at expiry it is above the strike price, investors can earn an annualized yield close to 3.15%.

However, if gold price swings violently and breaks a certain range, the product triggers an “automatic exit” mechanism, and the annualized yield drops back to a principal-protected level of about 1.2%.

Essentially, this is banks using financial derivatives to lock customer returns within a narrow range, encouraging speculation while hedging against the risks of one-sided gold price spikes and the resulting redemption pressure.

At the same time, foreign banks and regional banks are also following up with gold deposit products:

For instance, DBS's “DBS Treasures” introduced a bullish gold-themed structured deposit: term of 12 months, annualized yields of 1.5% and 4%, minimum starting amount of $10,000.

HSBC China launched a structured deposit linked to gold mining companies, starting at $20,000, with a term of 3 years and a maximum coupon annualized at 4.5%.

Regional commercial banks like Jiangsu Bank also launched similar products: minimum deposit only 10,000 yuan, yields classified into three tiers depending on gold price fluctuations.

It can be observed that major banks have not abandoned gold business, but hope to lock long-term funds at relatively low principal-protected costs through structured designs, balancing risk and profit.

Small and Medium Banks “Pave the Way”

In contrast to the big banks building walls and guarding themselves, regional city and rural commercial banks show a stronger desire to enter the market.

During the recent gold craze, Jiangsu Bank, Nanjing Bank, and Shanghai Rural Commercial Bank have all been actively developing their gold business:

For instance, Qingdao Bank, to optimize customer experience and increase investment in precious metals business, saw an explosive growth in “other business cost expenditures” on its financial statements.

Nanjing Bank continuously introduced professional traders and finally obtained membership at the Gold Exchange, transitioning from a “spectator” to an “operator.”

This is because a booming gold business is a traffic gateway for wealth management and a tool for expanding client base.

Hangzhou Bank's Vice President Li Xiaohua recently wrote that as gold becomes increasingly attractive for investment and as client demographics get younger, bank channels, leveraging their comprehensive financial services, are emerging as the core venue for younger groups to invest in gold.

However, most small and medium-sized banks still face a key pain point in the gold business: lacking the full license (financial membership) for the Shanghai Gold Exchange, unable to independently offer self-operated gold accumulation business.

“Indirect layout” has thus become the survival strategy for small banks hoping to get a slice of the pie.

Especially for banks with weak technological infrastructure, “hatching eggs with borrowed chickens” has become mainstream: buying systems from tech firms, sourcing gold from large suppliers, and acting as a traffic channel themselves.

A fintech industry insider told Xinfeng (the publication) that a mature industry supply chain has formed: upstream, state-owned banks or major gold traders with SGE membership; midstream, fintech firms provide standardized systems; downstream, small and mid-sized banks are responsible for acquiring customers.

“This is currently the mainstream and compliant model,” the insider said.

Empowered by technology, small banks only need to pay subscription or maintenance fees to tech companies to quickly launch gold accumulation features on mobile banking. These “precious metals middle platforms” connect core banking systems and external gold quotes in real time via API interfaces.

It’s worth noting that this model, while solving the entry barrier, also brings concerns.

The most prominent challenge is system stability and quote delays. In extreme markets, a few seconds of delay may cause customers to face significant slippage losses.

The clients “roped in” by small banks in the gold market also include county-area residents with weak risk identification capabilities; they see gold as a "hard currency" for safety, often overlooking the leverage and volatility of derived products.

Xinfeng learned that some tech companies have introduced circuit breaker mechanisms in their system optimizations.

The insider commented: “Our systems’ latency is close to that of big banks. If the price moves hugely in an instant, the system won’t transact—so in rapid rallies, you can’t buy, and in extreme drops, you can’t sell. To some extent, this avoids blind execution losses during extreme declines.”

However, the safety gained from “no execution” might also make investors miss the window for stop-loss or profit-taking during extreme markets.

When the huge waves of gold price volatility crash ashore, whether technical systems are robust enough and whether emerging client bases are resilient enough will be put to the test in coming cycles.

It can be expected that, with gold prices fluctuating at high levels, this fragmented landscape will persist:

State-owned major banks, leveraging licenses and risk control, aim to create a more rational, professional investor market, while small banks, empowered by technology, keep pushing out the boundaries of gold investment.

But regardless of strategy, after February’s turmoil, all market participants should realize that the true nature of gold includes not just its dazzling luster—but risks that have never disappeared.

Risk Disclosure and DisclaimerThe market has risks; invest with caution. This article does not constitute personal investment advice, nor does it take into account the individual user's specific investment objectives, financial status, or needs. Users should consider whether any opinion, view, or conclusion in this article is suitable for their particular situation. Accordingly, responsibility for investment lies with the user. ```