China Moves Major Banks From Paper Gold Trading to Physical Gold

Industrial and Commercial Bank of China (ICBC), the world’s largest bank by assets, announced it will cease offering individual paper gold products linked to the Shanghai Gold Exchange as of July 24. Postal Savings Bank of China, Ping An Bank and China Guangfa Bank have made similar decisions, ending retail futures‑based gold trading.

The moves are part of a broader national strategy to shift Chinese investors from derivative gold contracts to allocated physical bullion. The People’s Bank of China has been steadily adding to its official gold reserves, expanding storage capacity and encouraging institutions and citizens to hold physical bars and coins. Officials cite de‑dollarisation, diversification and strengthening balance‑sheet assets as motivations, while also seeking to provide a price floor for gold amid global uncertainty.

Analysts note that the coordinated exit from paper gold could reduce the dominance of Western paper‑based pricing hubs such as London and New York, giving the Shanghai Gold Exchange, the world’s largest physical spot gold market, a larger role in global price discovery.