Listen to the latest episode of Investment Magazine's Market Narratives podcast, exploring the impact of the Basel III changes on gold, global investment trends and the role of gold as a strategic asset.
As Basel III comes into force, we look at the impact of the Net Stable Funding Ratio (NSFR) on the gold market.
There has been much debate about the implications of Basel III on the bullion industry. What is clear is that the under the current rules the cost to banks of holding gold on balance sheet will increase – the NSFR requires 85% of required stable funding.
The Islamic finance market is now valued at more than US$2tn and growing at a rapid rate. The association between Islamic finance and gold dates back many centuries but, until recently, Islamic savers were unclear whether they could invest in gold products. In 2016, the AAOIFI Shari’ah Standard on Gold, developed in collaboration with the World Gold Council, provided the clarity that investors needed.