Gold prices experience sharp volatility as banks intensively tighten trading leverage

Statistical data shows that since June, at least seven banks, including the “big four” state-owned banks and China Merchants Bank, have adjusted the margin ratios for this business. Among them, several institutions have raised the margin ratio from around 100% to 120%, with the highest even reaching 140%. While the banking industry tightens risk control, the international precious metals market is undergoing sharp volatility. On June 22, the international spot gold price was around $4,210 per ounce, a significant drop from the annual high above $5,500 at the beginning of the year. Facing the persistent weakness in gold prices, major global banks have successively revised down their price outlooks. Goldman Sachs recently lowered its year-end 2026 gold price target by $500 to $4,900 per ounce, citing that a Federal Reserve rate cut is unlikely this year and economists have postponed the next rate cut forecast to 2027, directly reducing expectations for gold ETF inflows. Despite short-term pressure on gold prices, global central banks’ long-term demand for gold allocations remains robust.