iPhone | iPad
Android
Huawei
The former Indian High School (Dubai) student will now carry India's hopes at the swimming events of the Asian Games in China
KT APPDOWNLOAD
Dubai: New Basel III rules to dictate gold prices this week
Dubai - 24K price is expected to trade between Dh205 and Dh220 during the week
AP
The Basel III rules, which will come into effect on June 28, will dictate the gold prices this week, say analysts.
Under the Basel III rules, allocated gold will become a zero-risk asset for European banks while unallocated/paper gold will be considered risky and banks will need to collateralise 85 per cent of the value with cash.
“Ultimately the new rules will make it more costly for banks to hold unallocated gold accounts. So, the response could go one of two ways: Either banks will raise their costs to investors for unallocated gold, which will lower gold demand and hurt prices,” said Vijay Valecha, chief investment officer at Century Financial.
"Or banks would focus more on offering allocated gold accounts, creating a scramble for more physical gold bullion. The resulting liquidity squeeze would push gold prices much higher."
The new Basel III framework comes into force on June 28 for European banks and on January 1, 2022, for British banks, which would be a great game-changer for physical demand.
It was a choppy last week for the precious metal due to conflicting signals from the US Federal Reserve officials over the inflation outlook. Spot gold last closed 0.34 per cent higher at $1,781.29 per ounce.
Nonetheless, the psychological mark of $1,800 which coincides with the 100-day moving average at $1,795 has acted as a strong resistance for the metal,” said Valecha.
“Unless, the metal clears this mark, bulls may not be able to unleash additional gains. Meanwhile, $1,763-60 region is strong support area for the metal. The metal is expected to remain range-bound between these levels and only a sustained break on either side will determine the next direction in gold,” he added.
In the UAE, 24K gold price was trading at Dh215.75 per gram, 22K at Dh202.75, 21K at Dh193.5 and 18K at Dh165.75 on Sunday morning.
In UAE, Valecha expects 24K gold price trading between Dh205 and Dh220 during the week.
More news from
From workplace to money matters, know what the stars have in store for you today
Prices remained supported by concern about tight supply globally
Asia’s leading franchising leaders vow to globalize 100 UAE homegrown brands
The 5-member team, including 4 nurses and a doctor, worked with local charity organisations to help those in need after the devastating temblor
The veteran 87-year-old leader urges Guterres to call an international conference on creating a Palestinian state
For now, the Argentine said he is focused on the 2024 US-hosted Copa America tournament
The Upper House passed the Bill unanimously with 214 members voting in support and none against