Gold prices fluctuate at high levels, with some banks raising gold spreads to control risk

Reporter: Peng Yan

Since late March, the gold market has ended its previous one-sided upward trend and has entered a phase of significant fluctuations and corrections. As of March 27, when the reporter filed this article, the London spot gold price was reported at $4,443.66 per ounce, significantly rebounding from previous lows, but overall still within a high volatility range. In response, some banks have raised trading thresholds by adjusting gold spreads and other measures to mitigate risks, and have issued frequent risk warning announcements for the precious metals market, reminding investors to invest rationally and strictly control their positions.

On March 21, China Merchants Bank’s app released a notice regarding the adjustment of gold account spreads. Starting from March 23, 2026, the bank’s gold account business will adjust the buying and selling spread to 5 yuan per gram at the same quotation point, where the buying side spread will increase by 2 yuan per gram, while the selling side spread will remain unchanged. The adjusted spread scheme is expected to run until June 27, 2026. Beginning on June 29, 2026, the buying and selling spreads at the same quotation point will be adjusted to 2.5 yuan per gram respectively.

The gold spread is the difference between the buy and sell prices in gold trading and is the main fee charged by the trading service provider, constituting the core of the investor’s trading cost. For example, with a base quote of 1,000 yuan per gram, the spread before adjustment was 3 yuan per gram, meaning the investor’s buy price was 1,003 yuan per gram; after the adjustment, the spread rose to 5 yuan per gram, changing the buy price to 1,005 yuan per gram, thus increasing the cost for investors purchasing gold.

Jiangsu Bank has also adjusted its gold spreads. According to the bank’s app, starting from March 19 at 20:00, the bank will timely adjust the buying and selling spreads for gold accumulation based on fluctuations in international and domestic gold prices and market liquidity. Specifically, from January 1 to March 31, the buying and selling spreads for gold accumulation at Jiangsu Bank included a total transaction fee of 2.4 yuan per gram; from April 1 to December 31, the total transaction fee will be 2.8 yuan per gram, with the excess portion of the price difference not being a bank fee, but rather a result of market liquidity and other factors.

Qu Rui, senior deputy director of the research and development department at Dongfang Jincheng, told the Securities Daily reporter that the current international gold prices are experiencing severe fluctuations, with daily amplitudes repeatedly reaching new highs. By raising gold spreads, banks can cover the hedging costs and operational expenses brought about by price fluctuations, while also alleviating the settlement and liquidity pressure caused by frequent small transactions. Additionally, this can filter out retail investors with weaker risk tolerance, implement regulatory requirements for investor suitability management, avoid irrational trading that could lead to losses, and mitigate the risk of physical squeeze that may occur from gold price corrections, thereby balancing risk and reward.

In response to market risks, several banks including Bank of Communications, Bank of China, China Construction Bank, Minsheng Bank, and Industrial and Commercial Bank of China have recently issued risk warning announcements for precious metals business, stating that current precious metals prices are experiencing severe fluctuations and market uncertainty has significantly increased. They advise clients to enhance their risk awareness, invest rationally based on their financial situation and risk tolerance, and control their positions reasonably.

Qu Rui indicated that ordinary investors should choose their investment direction based on their own risk tolerance. Those with a lower risk appetite may shift towards low-risk products such as government bonds and money market funds; investors who possess relevant risk tolerance should avoid high-frequency trading, participate through batch investments and total volume control, avoid heavy positions and leveraged trading, and pay attention to changes in trading costs due to bank rule adjustments, rationally adjusting their gold allocation ratio.

Liu Feipeng, a researcher at China Postal Savings Bank, stated that the series of measures taken by banks aim to cover market volatility risks and suppress short-term speculative behavior. Investors should avoid high-frequency trading and participate in investments from a medium- to long-term allocation perspective.