$Why Basel III regulations are poised to shake up the gold market Published: June 24, 2021 at 3:02 p.m. ET By Myra P. Saefong
$European banks face beefed up liquidity requirements under the “Net Stable Funding Ratio’ on Monday
New banking rules, part of an sweeping international accord known as Basel III, will come into effect on Monday and mark a big change for European banks and their dealings with gold — potentially altering the landscape for precious metal demand and prices.
Like many reforms put in place over the past decade that aim to avert another global financial crisis, the new banking rules come with some controversy — and caveats.
“So, odds are great gold will soon bounce sharply higher as speculators’ kneejerk gold-futures purging quickly exhausts itself. Like Powell himself often warns, the dot plot has proven notoriously inaccurate at forecasting future federal-funds-rate levels. 2023 is still years away, and the FOMC lacks the courage to hike rates anyway if that drives major stock-market selloffs. That’s a serious risk with today’s bubble valuations!
And since that March 2020 stock panic, the Fed has frantically printed trillions of dollars of new money to stave off a depression-triggering serious stock bear. $In only 15.0 months since the Fed’s balance sheet has mushroomed a staggering 84.4% or $3,640billions! This profligate Fed has nearly doubled the US-dollar supply, which is why price inflation is soaring everywhere. That is really bullish for gold prices going forward.”