Chinese banks are accelerating efforts to scale back retail trading of precious metals, with the price of gold below US$4,000 an ounce for the first time since November, highlighting growing volatility in a market that has lost nearly 30 per cent of its value since peaking earlier this year.

Industrial and Commercial Bank of China (ICBC) said on Wednesday it would stop offering individual trading in precious metals linked to the Shanghai Gold Exchange from July 24.

The move follows similar announcements by Postal Savings Bank of China, Ping An Bank and China Guangfa Bank, which have suspended or are preparing to exit the same trading market.

The move comes as gold prices have retreated sharply from record highs reached earlier this year, prompting banks to tighten risk controls on precious metal trading products.

Spot gold briefly fell below US$4,000 an ounce on Wednesday, extending a sharp sell-off driven by a stronger US dollar and amid expectations that interest rates could remain high. Gold has retreated significantly from a peak of nearly US$5,600 an ounce reached earlier this year.

Investors have also scaled back expectations for Federal Reserve rate cuts, while rising US Treasury yields have reduced the appeal of non-yielding assets such as gold.

Banks have responded by tightening risk controls on products that allow margin trading of precious metals for individuals. Several lenders, including Bank of China and China CITIC Bank, have raised margin requirements this month, with some reaching 140 per cent.