Industrial and Commercial Bank of China (ICBC) saw its Class A shares decline 0.55% on Friday, closing at 7.26 yuan. The drop coincided with the bank's announcement of new quota controls for its Ruyi Gold accumulation trades during weekends and public holidays, effective February 7.
Gold Market Jitters Prompt Risk Controls
The restrictions reflect heightened volatility in domestic bullion markets, which have shifted from hedging to speculative trading. ICBC is implementing both total and individual daily limits for Ruyi Gold transactions on non-trading days, though physical gold withdrawals remain unaffected. Trading volume for ICBC's shares reached approximately 251.5 million shares during the session.
Other major players are taking similar precautions. China Gold has suspended precious-metals buybacks on weekends and holidays, while retailer Caibai has halted buybacks on non-trading days and imposed limits during regular hours. Analysts note these measures are aimed at cooling overheated speculative sentiment.
Broader Market Implications
The turbulence extends beyond China. CME Group has raised margin requirements multiple times for gold and silver contracts due to sharp price swings, with the latest increase taking effect after Friday's close. Meanwhile, China's central bank continued its gold-buying spree, adding to reserves for a fifteenth straight month in January.
Investors are now turning their attention to upcoming Chinese inflation data, scheduled for release on February 11. The figures could influence interest rate expectations and impact bank stock performance, particularly as potential rate cuts may pressure net interest margins.
