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As of 2017, gold still accounts for a fraction of global financial assets. In the 1960s, gold`s share of global financial assets was ten times higher than in 2015. Test your strategy to see how gold will evolve with Orbex – open your account now. However, investors continue to treat gold as a safe haven. Thus, the fundamentals that dictated the price of gold remain. Meanwhile, China has not only significantly increased its official gold reserves, but it has also encouraged its private banks to hold large amounts of gold. Gold is now part of the Chinese banking system. According to a 2014 World Gold Council report, Understanding China`s Gold Market, “Gold is synonymous with silver in Chinese culture and has been a preferred form of saving for generations, so it`s no surprise that it has become an increasingly important part of the financial system. Does that mean it takes 100 ounces of gold as collateral to borrow 15 ounces of dollar gold equivalent from a bank? It is important to note that the BIS does not mention the reclassification of gold as a risk-free asset. On the contrary, it is up to each bank to recate the gold either in animal I or in animal II. Commentators claim that after Basel III, gold will soon be a “tier 1-asset”. Going back to our favorite quote from physicist Wolfgang Pauli, it`s not even wrong.

As mentioned above, animals refer to the capital of a bank, that is, its commitments. How it finances its portfolio of assets. Here, gold is wrong. For both forwards and options, gold is considered a currency and not a commodity: (b) For stock options and stock indices, the market value of the underlying should be multiplied by 8%. [38] (c) For foreign exchange and gold options: the market value of the underlying should be multiplied by 8%. . . .