(Yicai) May 28 -- Several Chinese lenders have eased restrictions on their gold accumulation plans, including lowering the product risk rating and extending trading hours, as prices of the precious metal decline.

China Construction Bank updated its rights and interests notice and risk disclosure statement for the clients of its gold accumulation plans on May 25. While the lender kept the risk rating unchanged at R4 (high risk), it revised the description to “medium-to-high risk” from “high risk.”

International gold prices have entered a downward cycle after experiencing a sharp rise early this year, followed by great volatility. They have dropped to below USD4,500 per ounce, according to data from Wind Information. The AU9999 price on the Shanghai Gold Exchange has fallen to around CNY982 (USD145) per gram.

Industrial and Commercial Bank of China said on May 12 that it would lower the risk ratings of its Ruyi Gold Accumulation Plan from R3 (medium risk) to R2 (low-to-medium risk) from May 19.

In addition to adjusting risk ratings, many banks have also enhanced transaction convenience and reduced costs. They are also offering more fee discounts.

Last month, China Industrial Bank launched a gold accumulation agency sales service in collaboration with JD Jinyue Xiamen Digital Technology and extended trading hours on its mobile and online banking platforms to until 2 a.m. from 11 p.m., starting from May 8.

CCB, China Merchants Bank, Bank of Jiangsu, and China Minsheng Bank also opened after-hours trading services to cover active periods in international gold markets.

Citic Bank is offering a 50 percent discount on service charges for automatic investment in its gold accumulation plans until June 30. Bank of China launched a ‘Friday Discount,’ giving a CNY1 (15 US cents) per gram reduction in service fees paid by customers who buy or make automatic investments in gold accumulation plans on Fridays until June 30.

The shift in banks’ gold products from tight to loose reflects, to some extent, a consensus about the rise of the gold price center, said Lou Feipeng, researcher at Postal Savings Bank of China. Continuous gold purchases by global central banks provide an underlying support for gold prices, as the medium-to-long-term bullish logic has already largely been realized.

Against this backdrop, banks’ moderate expansion of retail customer coverage remains relatively manageable in terms of the risk-benefit ratio, Lou pointed out.

Banks easing restrictions on gold accumulation plans does not mean the risks of gold investment have disappeared.

Given the high gold prices with fluctuations, new retail investors entering the market are more susceptible to emotional influences, Lou noted. If gold prices fall greatly in the future, losses investors suffer will likely lead to complaints or even reputational risks, so banks must strengthen investor suitability management and risk disclosure while lowering the access threshold, he added.

Return on investment of bank wealth management products has generally declined over the past years, traditional deposits have become less attractive, and volatility in equity markets has further dampened household risk appetite, a retail business employee at a joint stock bank told Yicai. Gold, which offers a safe-haven attribute and is inflation-protected, has drawn increasing attention from investors.

Editor: Futura Costaglione