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  • Chinese banks bar clients from buying precious metals

    Chinese banks bar clients from buying precious metals

    In an attempt to avoid another retail-driven momentum meltup similar to what happened with Chinese stocks earlier this month when government-media first encouraged Chinese investors to buy stocks only to backtrack days later when local markets soared sparking fears of another stock bubble on the mainland, Reuters reported that Chinese regulators and major banks have been rushing to curb precious metal trading by domestic investors to temper speculation that could send prices explosively higher, something we hinted at just last week.

    H/T: Zero Hedge

    Industrial and Commercial Bank of China (ICBC), the country’s biggest lender, said on Wednesday it would bar its clients from opening new trading positions for platinum, palladium and index products linked to precious metal from Friday, according to Reuters. That directive, according to the lender’s customer service department, was in response to “violent price volatility” and “the need to control risks.”

    "If the gold price rises past $2,000, some more hot money will certainly flow into the market, and some investors will divert their stock investments to gold," said Frank Hao, an analyst at Hywin Wealth Management in Shanghai.

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