Gold Plunge Stalls as China Shuts Retail Trading, Curbs Inflows to Hottest AI Funds

The PRICE of GOLD steadied above $4000 per troy ounce on Thursday as banks in the precious metal's No.1 consumer nation China urged retail investors to stop trading and hold gold bullion savings products instead.

China's largest mutual fund manager meanwhile curbed flows into AI data-centre investment funds after they leapt in price by more than 306% from this time last year.

With gold in Shanghai today trading 30% below end-January's record peak in Chinese Yuan, major banks have lowered the risk rating on physical bullion programs for retail investors such as the Ruyi Gold Accumulation Plan from ICBC − the world's largest bank − with some cutting transaction fees as low as 0.2%.

Also today, ICBC said it will shut private investor access to trading on the Shanghai Gold Exchange, extending the clampdown made after gold and silver peaked this New Year and joining China Construction, Postal Savings, Ping An and China Guangfa banks in forcing retail traders to liquidate their positions after hiking margin downpayments to 120% on top of the SGE's own 20% charge.

"This is due to significant fluctuations in precious metals market prices," says China Construction Bank of its decision.

Shanghai gold prices today held $1.40 per ounce below London quotes, extending a run of discounts in China which signal weak demand versus local supply after May's import data showed the heaviest net inflow of gold bullion for more than two years.

Bullion in global trading and storage hub London today rallied as much as 1.8% from yesterday's new 7-month gold price low, peaking at $4033 per troy ounce − a loss of 27.9% from end-January's record high gold spike.

Still down more than 50% from then, silver prices also rallied with gold in London, rebounding as much as 6.1% from yesterday's plunge to the lowest since start-December at $55.60 per troy ounce.

The US Dollar rose again versus the rich world's other major currencies, testing its highest on the DXY index since April 2025's Trump tariffs.

The Dollar also spiked against the Chinese Yuan, peaking almost 0.8% above last week's 3-year low to touch the highest CNY exchange rate in a month.

While Chinese banks tried to shepherd retail investors out of active trading and leverage towards gold accumulation 'savings' products, Shanghai stock brokers also moved to curb investment inflows into the so-called "Standing in the light" sector of AI data-centre transceiver manufacturers.

This pluggable hardware converts electrical signals into light pulses to send and receive data via fiber optic cables. The so-called "Yi Zhong Tian" trio of China's top co-packed optics manufacturers saw combined revenue growth of 150% per year in the first quarter.

New subscriptions into the CPO sector's leading investment funds were today slashed by as much as 90% to just ¥10,000 (equivalent to less than $1,500) after the E Fund Information Industry Hybrid more than quadrupled in price from this time last year, outpacing even the 295% rise in the trust's NAV of assets it holds.