Demand may shift to physical bullion
Ms Tipa says China's crackdown on paper gold aims to reduce systemic financial risks, curb excessive speculation, and shift liquidity towards physical gold holdings to support economic stability.
China's recent move to curb retail trading of paper gold is expected to have a limited short-term impact on global gold market liquidity, as robust physical demand, particularly from central banks, continues to provide strong long-term support for prices, says YLG Bullion & Futures.China's crackdown on retail paper gold was a multi-year phased process that began in late 2020, when the Shanghai Gold Exchange (SGE) stopped accepting new retail account registrations.
The final phase came into effect on July 24, 2026, as commercial banks terminated all remaining retail paper gold trading, completing the transition from restrictions on new entrants to a full ban on retail participation.
YLG chief executive Tipa Nawawattanasub said the policy reflects Beijing's efforts to reduce systemic financial risks, curb excessive speculation, and redirect liquidity towards physical gold holdings to strengthen economic stability.
