Gold Prices Correct; Banks Promote Gold Accumulation
International gold prices have fallen approximately 20% from their January 2026 all-time high of nearly $5,600 per ounce to around $4,400 per ounce by late May, prompting Chinese banks to launch aggressive promotional campaigns for their gold accumulation products, according to Xinhua News.
Context
Gold experienced an extraordinary rally through late 2025 and into January 2026, driven by geopolitical tensions, global central bank purchases, inflation concerns, and dollar weakness. Since March 2026, however, prices have entered a sharp correction due to the Federal Reserve’s hawkish stance, elevated U.S. bond yields, signs of U.S.-Iran peace negotiations, and capital rotation toward interest-bearing assets.
By May 28, COMEX gold futures had broken below $4,400 per ounce, with intraday losses exceeding 1%, as reported by Time Weekly.
Key Developments
Banks Shift from Tightening to Promotion
Earlier this year, as gold prices surged, Chinese banks raised risk ratings and purchase thresholds to protect consumers from irrational buying. Now, with prices in decline, banks are pivoting to attract customers through fee reductions, extended trading hours, and partnerships with internet platforms.
ICBC, China’s largest bank, has reduced its active accumulation fee from 0.5% to 0.2% until June 30, and cut its fixed investment fee from 0.5% to 0% through December 31, according to CCTV Finance.
China Everbright Bank is offering new customers who start a fixed investment plan a 10 yuan WeChat Red Packet, with an additional 10 yuan for first-time holders of 2,000 yuan or more, Xinhua reported.
CITIC Bank has discounted its fixed investment fee to 0.3% — a 50% reduction — until June 30, with new customers receiving additional discount coupons.
Extended Night Trading Hours
Multiple banks have extended trading hours for gold accumulation products to cover international market activity. Industrial Bank extended its hours from 9:00-23:00 to 9:00-02:00 the next day starting May 2026. China Merchants Bank and CITIC Bank had previously made similar changes, with CITIC implementing the extension in March 2026.
“Previously, domestic gold accumulation business trading closed early. If international gold prices fluctuated at night, we could only watch anxiously,” a Beijing resident surnamed Xiao told Xinhua.
Risk Rating Adjustments
China Construction Bank will rename its product risk rating from “relatively high risk” to “medium-high risk” effective June 1, maintaining the R4 level. Meanwhile, ICBC adjusted its Ruyi Gold Accumulation product risk rating to R2 (medium-low risk) on May 19, requiring only a C2 (stable) investor rating — a significant relaxation from the C3 requirement imposed in January.
Growth in Gold Accumulation Business
The promotional push reflects the growing importance of gold accumulation products as a revenue driver. Postal Savings Bank of China reported that its gold accumulation transaction volume reached 12.32 billion yuan in 2025, a year-on-year increase of 270.33%, according to Xinhua.
ICBC added 263 new gold repurchase outlets in 2025 and launched gold accumulation products on JD Finance and Alipay platforms, expanding its digital reach.
Analysis
Investor Pain Behind the Correction
The price decline has been painful for investors who bought at peak levels. One investor from Guangdong told Time Weekly that he purchased 180,000 yuan worth of gold accumulation products at an average price of over 1,100 yuan per gram, and has since suffered losses exceeding 30,000 yuan.
Another investor, identified as Li Qun, borrowed over 1 million yuan to go “all-in” on gold. “Now I’m waiting for gold to rise back a bit, then I plan to sell some and pay back the high-interest loan first,” he told Time Weekly.
Expert Outlook
Qu Rui, Senior Deputy Director of Dongfang Jincheng Research, told China News Service that short-term gold prices will maintain a narrow range consolidation pattern, but the core logic supporting gold’s upward trend has not fundamentally reversed.
Wang Wenhu, an analyst at Hongyuan Futures Research Institute, identified falling U.S. consumer inflation, continuously increasing public debt, and central banks’ continued gold purchases as potential catalysts for future price increases.
Wu Zewei, a special researcher at Sushang Bank, advised that “gold’s role in personal asset allocation should be as a portfolio stabilizer, not a short-term speculative tool.”
What’s Next
International investment banks have cut their gold price forecasts. JPMorgan lowered its 2026 average forecast from $5,708 to $5,243 per ounce, while Morgan Stanley reduced its H2 2026 target from $5,700 to $5,200 per ounce. Citi set a three-month target of $4,300 per ounce.
Despite short-term bearishness, most analysts maintain a cautiously bullish long-term outlook, citing global de-dollarization trends, continued central bank purchases, U.S. fiscal concerns, and geopolitical uncertainty. Whether Chinese banks’ promotional campaigns can sustain transaction volumes amid falling prices remains an open question.