DISCOVERY BOARD ~ PRECIOUS METALS ENERGY URANIUM OIL Message Board

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Gold/Mining/Energy : DISCOVERY BOARD ~ PRECIOUS METALS ENERGY URANIUM OIL

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From: PaperPerson	4/19/2012 8:34:52 AM
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New Collateral Guidelines By Reserve Bank Of India Could Hurt Gold – HSBC Thursday April 19, 2012 8:28 AM Kitco News The Reserve Bank of India has asked retail banks to lower credit exposure to companies that lend money using gold jewelry as collateral and that ultimately might be bearish for gold prices as the RBI is trying to avoid systemic instability, says HSBC. “Price volatility has led to concerns that the value of gold held as collateral may on occasion be worth less than the money loaned by finance companies…. The RBI announced plans to issue detailed guidelines on the management of gold loans by financial institutions,” says James Steel, analyst at HSBC. “Tighter standards for gold as collateral could dissuade some holders of bullion from borrowing on their gold and instead sell that bullion into the market. Thus gold that would normally be locked up as collateral for loans may instead be sold onto the market, (which) has negative implications for gold prices,” he said.

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