Major Chinese banks, including ICBC, Postal Savings Bank, and Ping An Bank, will officially stop all retail leveraged gold trading tomorrow. The deadline requires existing retail clients to either close their positions, liquidate holdings, or take physical delivery of their assets by the end of the day.
It is said that the initiative is to protect investors from extreme market volatility and to shift price discovery toward physical metal rather than paper contracts. China's move is likely to have flow-on effects into the jewellery industry, particularly manufacturing (bench) jewellers and designers.
The suspension of these paper trading services follows a period of significant volatility, where gold prices dropped around 30 per cent from their January 2026 peak ($USD5,600/ounce) to below $USD4,000 earlier in 2026, prompting banks to raise margin requirements to as high as 140 per cent.
At the time of publication, the price was $4,137.87. (See chart below)
While this move eliminates retail access to margin trading, it is worth noting that physical gold purchases and non-leveraged investment products remain unaffected.
Strategic monetary goals also underpin the move, with powerbrokers in Beijing supposedly aiming to dismantle unbacked ‘paper contracts’ that critics argue artificially suppress global gold prices.
By forcing retail positions toward physical delivery or contract liquidation, China intends to eliminate synthetic supply, reduce Western influence on price manipulation, and reinforce the Shanghai Gold Exchange as a central hub for real gold settlement and pricing.
Simultaneously, the CME Group will implement 24/7 trading hours for its 1-Ounce Gold Futures contract on CME Globex, effective July 24. The Chicago Mercantile Exchange (CME) is the world's leading derivatives marketplace, enabling investors and institutions to trade futures and options.
Analysts view this date as a potential turning point where market dynamics may shift from paper speculation toward physical delivery, potentially creating arbitrage opportunities as prices in Shanghai diverge from Western markets.
So, what happens after 24 July?
Traders expect significant volatility and downward pressure in the short term, primarily driven by two converging factors: the closure of leveraged retail trading in China and expectations of a hawkish US Federal Reserve.
This means analysts maintain a bearish outlook for the remainder of 2026, citing a strong US dollar, rising Treasury yields, and the high probability of a September interest rate hike.
These factors increase the opportunity cost of holding gold because gold does not earn interest.
In the short term, some sources project gold will trade between $USD3,365 and $USD4,236, with some models predicting a decline to $USD3,822 by July 24.
Looking further down the line, forecasts widely vary; however, most lean towards conservative expectations.
JP Morgan recently updated its guidance, predicting gold will average $USD4,300 during the third quarter of 2026, pulling back on short-term expectations. Goldman Sachs forecasts that a temporary "nowcast" acceleration, driven by heavy central bank buying, will provide a firm price floor.
It views current pressure from high interest rates as short-lived and sees gold stabilising in the $USD4,000–$USD4,500 range, while the World Gold Council backs a stable mid-year framework, modelling gold to remain relatively rangebound at $USD4,100 (±5 per cent) immediately following July's change.
It should come as no surprise that the same institutions have a positive long-term (2030+) outlook. Despite near-term weakness, structural supports such as central bank buying and reserve diversification keep long-term targets high, with JPMorgan projecting gold could reach $8,000 by 2030.
Ultimately, the expectations for the immediate aftermath of July 24 are characterised by liquidation-driven volatility, while the medium-term trend depends on whether the US Federal Reserve delivers a rate hike or signals a pause in tightening.
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