Chinese Banks' Gold Products Become More Popular as Precious Metal Price Soars

Tue April 29 2025

Chinese commercial banks' investment products linked to gold have gained attention among depositors because of the sustained price increases of the precious metal.

A young depositor from Shenzhen told Yicai that she monitors her personal bank account's gold accumulation plan daily and adjusts her positions frequently due to volatile prices. Her plan's returns have exceeded 30 percent since early last year.

However, as the gold fever intensifies and prices fluctuate, over a dozen banks have raised their minimum purchase thresholds for gold accumulation plans since March to mitigate risks. For some lenders, that was not their first adjustment of the year.

For example, China Merchants Bank increased the minimum investment for its gold accumulation plan for the third time this year to CNY800 (USD110) from CNY750 on April 21.

To continue benefiting from this trend, several lenders have also extended their trading hours for gold accumulation plans, allowing app users to perform instant transactions even after offline branch closure. For example, China Construction Bank announced in January that it would extend its gold trading window to 2.30 a.m.

Banks Hike Precious Metal Holdings

The gold investment boom has buoyed banks' precious metal holdings. The 18 listed Chinese lenders that have already disclosed their 2024 financial statements had precious metal assets worth CNY770.9 billion (USD105.7 billion) as of Dec. 31, up 70 percent from a year earlier, according to data from Wind Information.

Among them, China's four large state-owned banks -- Agricultural Bank of China, Bank of China, CCB, and Industrial and Commercial Bank of China -- collectively held CNY641.5 billion worth of precious metal assets, up 83 percent in the period.

Lenders' income from precious metal transactions also climbed. For example, BOC saw its precious metal sales revenue surge nearly 41 percent to CNY20.1 billion (USD2.8 billion) last year from 2023, with the related commission income climbing 33 percent.

"As their interest margins narrow, banks are prioritizing non-interest income sources," a banking analyst told Yicai. "Gold's bull run over the past two years has positioned precious metals as a high-potential growth business."

Source: https://www.yicaiglobal.com/