Chinese banks lure investors with gold-linked deposits amid soaring prices

Sat Jan 17 2026

An increasing number of Chinese and foreign banks are launching gold-linked structured deposits to attract investors seeking higher returns tied to gold prices, which analysts say provide an alternative to poor returns from time deposits.

Rising gold prices, which continue to hit new highs this year, are fuelling renewed enthusiasm in gold as an investment in mainland China. While gold has increased 6 per cent this year to over US$4,620 an ounce, a Goldman Sachs forecast last month projected bullion to hit US$4,900 by December 2026.

Meanwhile, five major state-owned banks, including Bank of China and Industrial and Commercial Bank of China, currently offer 0.95 per cent on a one-year fixed deposit.

“Deposit rates have been continuously trending downwards, failing to meet investors’ demand for preserving and increasing the value of their assets,” said Fu Yifu, a special researcher at Su Merchants Bank based in Nanjing, Jiangsu province.

“Meanwhile, gold is a safe-haven asset, and its price movement has a low correlation to traditional assets such as stocks and bonds. When the global economy faces uncertainties, gold tends to be resilient.”

By allocating to gold-linked products, investors could reduce the overall risk of their portfolios to a certain extent, Fu added.

China Merchants Bank is among the mainland banks that have rolled out multiple gold-related products. The latest gold price-linked structured deposit launched on Monday offers flexible tenors starting at seven days and a minimum investment of 10,000 yuan (US$1,435). The product’s expected annualised return ranges from 1 per cent to 1.78 per cent, depending on gold’s performance.

In 2025, gold achieved over 50 all-time highs, with prices rising 60 per cent from a year earlier, according to a report from the London-based World Gold Council (WGC) in December. For 2026, WGC said the outlook for gold would be shaped by ongoing geoeconomic uncertainty, while adding that prices would largely reflect macroeconomic consensus expectations and might remain rangebound if current conditions persist.

Softer growth, accommodative policy and persistent geopolitical risks were likely to support prices rather than undermine them, and gold investments still had room to grow, the WGC said.

By the end of last year, the number of bank wealth management products on the mainland with “gold” in their names had reached 52, according to China Wealth (Asset) Management Registry and Custody, and its data showed that such products were barely seen a couple of years ago. In December alone, seven such gold-related products were launched, it said.

With international gold prices repeatedly hitting record highs and seeing heightened volatility, ICBC on January 12 raised the investor risk rating threshold for its gold accumulation scheme, following similar moves by other banks.

ICBC raised the risk tolerance threshold for new gold accumulation business applicants from conservative to balanced, aiming to strengthen investor suitability management and adapt to the current risk environment.

“Gold accumulation schemes are no longer low-risk alternatives for savings deposits,” Fu said. “This is a rational move, aimed at preventing risk mismatch, strengthening compliance and protecting investor interest.”

By upgrading their risk rating to medium, banks could identify and target suitable investors while preventing less risk-tolerant groups from entering the market blindly, Fu said. This would be beneficial to the long-term steady development of the precious metals investment market, he added.

Meanwhile, foreign banks are focusing on longer-duration and higher-yielding products.

DBS Bank launched a capital-guaranteed structured deposit on January 1. The product offers returns linked to the US dollar spot gold price, with a 12-month tenor, a minimum subscription amount of US$10,000 and an annualised return range of 1.5 per cent to 4 per cent.

The return structures of many products were sophisticated and such investments carried uncertainties, Fu said.

“If gold prices swing beyond expectations and fail to reach the preset range, investors may only get the minimum guaranteed return – even lower than regular deposits” Fu said. “Besides, most products prohibit early redemption, exposing investors to the risk of missing out on other investment opportunities.”

Source: https://www.scmp.com/