China’s Biggest Banks End Retail “Paper Gold” Trading in Major Market Shift

On 24 July 2026, several of China’s largest banks stopped providing individual customers with access to certain precious-metals contracts linked to the Shanghai Gold Exchange.

The decision has been described in parts of the financial media as “China ending paper gold trading.” While it represents an important change in China’s retail precious-metals market, the description requires clarification.

China has not closed the Shanghai Gold Exchange, banned gold trading or prohibited private gold ownership.

Instead, major Chinese banks have withdrawn their intermediary services for specific retail trading contracts—particularly products involving deferred settlement, margin trading and exposure to gold prices without necessarily holding physical bullion.

What Changed on 24 July?

The Industrial and Commercial Bank of China, commonly known as ICBC, announced that it would discontinue its agency service for individual precious-metals auction trading after the end-of-day settlement on Friday, 24 July 2026.

The affected contracts included:

• Au99.99
• Au100g
• Au99.95
• Au (T+D)
• mAu (T+D)
• Au (T+N1)
• Au (T+N2)
• Ag (T+D)
• PGC30g

ICBC advised existing customers to sell, close or take delivery of their positions and withdraw remaining funds from their margin accounts.

Access to the affected products through mobile banking, online banking and bank branches would subsequently be restricted.

View ICBC’s official announcement

Other major institutions—including Postal Savings Bank of China, Ping An Bank, China Guangfa Bank and China Construction Bank—reportedly announced similar measures affecting individual trading linked to the Shanghai Gold Exchange.

What Is Paper Gold?

Paper gold is a broad term for financial products whose value follows the price of gold without requiring the investor to personally hold a gold bar or coin.

These products can include:

• Gold futures
• Deferred-settlement contracts
• Bank-managed gold accounts
• Exchange-traded gold products
• Other forms of financial exposure to gold prices

Some paper-gold products are backed by physical bullion or provide an option for physical delivery. Others are used mainly to speculate on whether the price of gold will rise or fall.

Certain contracts affected by the Chinese banks’ decision allowed retail customers to trade using margin. This meant an investor could control a position larger than the amount of capital deposited into the account.

Leverage can increase profits when gold moves in the desired direction, but it can also produce rapid losses and margin calls when prices move against the investor.

Why Did Chinese Banks Make the Change?

ICBC attributed the decision to precious-metals risk management and its own business requirements.

The move followed a period of unusually high gold-price volatility. Sharp price movements can expose inexperienced retail traders to substantial losses, particularly when leverage is involved.

Volatile trading can also create financial, operational and reputational risks for banks providing access to complex investment products.

By withdrawing from this part of the market, Chinese banks are reducing their exposure to speculative retail activity and the potential consequences of sudden commodity-price movements.

The decision therefore appears to be primarily a risk-management measure—not an official declaration that physical gold should replace every form of financial gold trading.

What Gold Investments Remain Available?

The 24 July change did not end China’s wider gold market.

The following areas remain available or unaffected by these particular bank announcements:

• Physical gold bars and coins
• Gold jewellery
• Gold exchange-traded funds
• Gold accumulation plans
• Institutional gold trading
• Shanghai Gold Exchange physical-delivery services
• China’s central-bank gold reserve activities

Institutional trading and physical delivery through the Shanghai Gold Exchange continue. The exchange was operating normally on 24 July and published a Shanghai Gold afternoon benchmark price of RMB881.09 per gram for that date.

Visit the official Shanghai Gold Exchange website

Could the Decision Strengthen Physical Gold Demand?

The change could encourage some retail investors to move toward direct ownership of bullion or other non-leveraged gold investments.

Customers who previously used bank-mediated contracts may now consider physical bars, coins, gold ETFs or accumulation plans.

However, it is too early to conclude that the decision will produce a major increase in physical gold demand.

The eventual effect will depend on the size of the positions being closed, how many customers choose physical delivery and whether investors move into other financial products instead.

If a meaningful proportion of former paper-gold traders chooses bullion, physical demand could receive additional support. If most customers transfer to ETFs or leave the market, the impact may be limited.

Could It Change Global Gold Pricing?

Some precious-metals commentators believe reducing paper trading could make physical supply and demand more influential in China’s gold-price discovery.

According to this argument, leveraged financial contracts can amplify both rallies and sell-offs because traders can establish positions larger than their underlying capital.

Removing part of that speculative activity may reduce forced selling and create a market more closely connected to physical ownership.

However, this remains a market interpretation—not a confirmed objective of the Chinese government or the banks involved.

China’s retail bank products represent only one part of the international gold market. Global prices continue to be influenced by:

• Physical gold demand
• Central-bank purchases
• Mining production and supply
• Gold exchange-traded funds
• Interest-rate expectations
• US dollar movements
• Futures trading in London, New York and Shanghai
• Geopolitical and economic uncertainty

For that reason, the closure of these Chinese retail channels alone is unlikely to end global paper gold trading or immediately produce a dramatic repricing of bullion.

A Structural Change, but Not the End of Paper Gold

The 24 July deadline marks a significant retreat by major Chinese banks from retail precious-metals speculation.

The move could reduce leverage, protect individual customers from extreme losses and encourage greater interest in direct or non-leveraged gold ownership.

However, claims that “China has ended paper gold” go too far.

The more accurate conclusion is that several leading Chinese banks have ended access to specified Shanghai Gold Exchange contracts for individual customers.

Physical gold remains available, gold ETFs continue trading, institutional markets remain open and the Shanghai Gold Exchange continues to operate.

The paper trading days are not over globally—but for many Chinese retail bank customers, an important part of that market has now closed.