At least a dozen large Chinese banks plan to stop offering leveraged precious metals futures to retail clients, according to Mike Maharrey of Money Metals News Service. The lenders are shutting down Shanghai Gold Exchange (SGE) margin-traded deferred contracts, including Au(T+D) and Ag(T+D). The move could potentially increase demand for physical metal in China, the world’s largest gold market, Maharrey reported.
Who’s exiting—and when
Beijing-based China Everbright Bank is the latest to announce an end to leveraged precious metals trading, targeting an exit sometime after Oct. 19, per Money Metals. Earlier this month, Shanghai Pudong Development Bank made a similar announcement. They join at least 10 other major lenders that have exited or plan to exit, including Industrial and Commercial Bank of China (ICBC), Bank of China (BOC), and China Construction Bank, according to the same report.
Did the SGE tell banks to pull back?
Sources at two banks told the South China Morning Post (SCMP) that the SGE directed the move. The SGE is China’s primary platform for physical gold and silver trading. Officials also appear to be phasing out unleveraged spot gold futures contracts for retail customers, per Money Metals.
Why now: risk, margins, and the 2020 shock
Orient Futures analyst Xu Ying called the shift “an inevitable” one and predicted every major bank will eventually exit, the SCMP reported. Xu said leveraged trades are “a poor fit for domestic retail clients,” who often have “limited trading know-how and tend to be risk averse.” As volatility rose, banks progressively raised margin requirements; by the end of the first quarter, state-owned banks had raised them to 100 percent, effectively eliminating leverage, according to Money Metals.
The oil price collapse in April 2020 put a spotlight on retail leverage. An unnamed Bank of China source told the SCMP that after the “fiasco,” regulators began “mulling a broader phase-out of retail commodity-linked trading products offered by domestic banks,” adding the episode prompted “sweeping regulatory caution towards retail leverage instruments.” The same source said mainland lenders will now be expected to offer “only physical gold and non-leveraged gold-accumulation plans” to retail clients.
What replaces leveraged trades
Money Metals reports the shift could push some speculative paper trading into physical gold and silver. The piece notes that if investors want to keep exposure, they may pivot to physical metal, long-term accumulation plans, exchange-traded funds available via securities accounts, or digital gold products. Money Metals also says banks seem to be guiding customers toward physical metal and bank-run accumulation plans.
The scale at risk of moving
Based on SGE data cited by Money Metals, three major deferred gold and silver contracts generated roughly 12.6 trillion yuan (about $1.9 trillion) in two-sided trading value in 2025. That figure covers the entire market for those contracts, not just retail activity, and reflects repeated trades rather than new capital committed. Public data do not show how much retail money might now be redirected.
What to watch next
Key signals include whether all major banks follow through on exits predicted by Xu Ying, any formal guidance from the SGE or regulators, and clarity on the status of unleveraged spot products for retail. Money Metals reports Everbright’s exit is planned for sometime after Oct. 19.
Editor’s note: All claims above are attributed to Money Metals News Service and the South China Morning Post as cited. Human approval is required before publication.
