(Yicai) April 17 -- Chinese residents’ demand for gold investment surged last year amid rising international gold prices, driving the rapid expansion of lenders’ precious metal businesses.

Thirteen banks that have already released their financial data for last year have reported precious metal assets of over CNY1 trillion (USD146.5 billion), while six saw their assets double in value from 2024.

The continuous release of residents’ demand for buying gold has become the core supporting factor for the growth of banks’ precious metal business, industry insiders believe.

The transaction amount of Postal Savings Bank of China’s gold accumulation program soared 270 percent in 2025 from the previous year, while the income from such program climbed more than 160 percent, according to the lender’s annual earnings report.

The precious metal sales revenue of Bank of Communications and Bank of China jumped 33 percent and 114 percent, respectively, in the period, per their financial statements. 

Industrial and Commercial Bank of China reported CNY111.2 billion (USD16.3 billion) in net income from fees and commissions last year, up by CNY1.8 billion (USD260 million) from 2024, mainly thanks to the growth in income from related businesses, such as agency services of precious metals.

The scale of precious metal assets of Shanghai Pudong Development Bank reached CNY82.4 billion (USD12.1 billion) at the end of last year, up 257 percent from a year earlier. That of Ping An Bank expanded 145 percent to CNY30.9 billion in the period.

Data from the World Gold Council show that Chinese investors purchased record 432 tons of gold bars and coins in 2025, up 28 percent from the year before. China’s consumption of gold bars and coins rose 35 percent to 504.2 tons in the period, according to statistics from the China Gold Association.

“Even though the gold market is facing challenges due to high volatility this year, banks are still deepening their precious metal business,” said Zhu Guangyue, analyst at Guozheng Securities. With the fundamental support from continuous gold purchases by global central banks, the contribution of precious metal business to lenders’ profit stability is likely to become increasingly prominent, he added.

Banks have also implemented measures to cool down their precious metal businesses due to fluctuations in gold prices, such as raising the minimum purchase amount and strengthening risk warnings.

For example, Industrial and Commercial Bank of China has gradually increased the minimum purchase amount for GAP to CNY1,300 from CNY650 (USD190 from USD95), while China Construction Bank has hiked the threshold to CNY1,500.

Regarding the future trend of gold prices, there is still considerable disagreement in the market, but the underlying support logic for the medium and long term remains unchanged.

The long-term trend of gold prices is mainly driven by three factors, said Qu Rui, senior deputy director for research and development at Golden Credit Rating International.

The first one is related to the normalization of geopolitical risks, the fiscal pressure in the United States, and the weakening of the US dollar credit. The second is that the upward shift of energy prices and the potential interest rate cut cycles have suppressed real interest rates. And the third is that central banks across the globe continue to increase their gold holdings against the backdrop of adjustments in the global political and economic order.

Demand for buying gold as a reserve asset is expected to remain strong this year.

“However, geopolitical conflicts, inflation expectations, and the path of monetary policy may still cause significant fluctuations in gold prices in the short term,” Qu noted. “In different scenarios, gold prices may alternate between rapid rise and periodic fall, with high market fluctuations.”

Editor: Futura Costaglione