Chinese banks have suspended the opening of new trading accounts for precious metals.
The decision is believed to be due to the current volatility in the prices of gold and other precious metals.
The price of gold has been falling since reports of promising trials on the COVID-19 vaccine.
Commercial banks in China are suspending the creation of new gold and precious metals trading accounts due to massive market volatility.
The positive news on the coronavirus vaccine trials saw a pivot from safe-haven assets to riskier investment instruments, causing the prices of precious metals, especially gold, to drop significantly.
Chinese banks wary of gold volatility
Major Chinese banks are suspending the opening of new gold trading accounts from Saturday (November 30), according to a Reuters report from November 27 . The suspension will cover both over-the-counter and mobile banking channels.
Earlier in November, some banks across the country issued warnings about impending restrictions on forex and precious metals. At the time, palpable concerns raged about the possibility that the U.S. election fallout could cause significant disruption in the global marketplace.
In a statement on its website, the Industrial and Commercial Bank of China said:
Affected by the global epidemic situation and the international political and economic situation, international and domestic prices of precious metals continued to show volatility. Market risks and uncertainties have increased.
The November 27 announcement does not affect clients with existing gold trading accounts. However, banks are warning investors to beware of the current market volatility.
The price of gold has been falling since the beginning of November, a drop of more than 8%. At the time of this article’s publication, gold futures were at their lowest in more than five months, with the spot price falling below the $ 1,800 mark.
In early August, gold hit a record high (ATH) price of $ 2,060 per ounce. However, the good news about the coronavirus vaccines dampened investor optimism in safe-haven assets, which triggered a significant drop.
Like gold, Bitcoin (BTC) is also struggling after failing to exceed its ATH earlier in November. The largest crypto by market cap has fallen more than $ 3,000 below its all-time high this year.
As previously reported by BeInCrypto, BTC is looking for a support level following multiple releases around $ 17,500.