Impact of Gold price on Banks

salt · 1 Impact of Gold price on Banks Mon Apr 15, 2013 3:48 pm

salt

Vice President - Equity Analytics

Posts : 1345
Equity Stars : 7824
Reputation : 90
Join date : 2011-01-31

Guys,

If the Gold price moves this way, it will have chaotic effect on some SL banks.
Sampath and PB are the riskiest among banks
LB Finance is riskiest among finance Companies

If market moves adversely ,
There will be huge pull out from Gold ETFs, it might speed up the process
Margin call on futures will cause forced selling

Light of Hope · 2 Re: Impact of Gold price on Banks Mon Apr 15, 2013 4:09 pm

Light of Hope

Vice President - Equity Analytics

Posts : 1014
Equity Stars : 5901
Reputation : 59
Join date : 2011-04-04

True. there was a news in the papers few weeks back. Well, LB Finance offered 55,555 for a 24K ounce last year. who's gonna pay this back with interest when they can buy cheaper form the market now. They are in a crisis

salt wrote:Guys,

If the Gold price moves this way, it will have chaotic effect on some SL banks.
Sampath and PB are the riskiest among banks
LB Finance is riskiest among finance Companies

If market moves adversely ,
There will be huge pull out from Gold ETFs, it might speed up the process
Margin call on futures will cause forced selling

salt · 3 Re: Impact of Gold price on Banks Mon Apr 15, 2013 4:12 pm

salt

Vice President - Equity Analytics

Posts : 1345
Equity Stars : 7824
Reputation : 90
Join date : 2011-01-31

Twin effects from currency appreciation & gold price decline on gold holdings of banks/ finance companies

OnlyGuru · 4 Re: Impact of Gold price on Banks Mon Apr 15, 2013 4:42 pm

OnlyGuru

Stock Analytic

Posts : 12
Equity Stars : 4260
Reputation : 0
Join date : 2012-10-03

Light of Hope wrote:True. there was a news in the papers few weeks back. Well, LB Finance offered 55,555 for a 24K ounce last year. who's gonna pay this back with interest when they can buy cheaper form the market now. They are in a crisis

Are you sure they offered 55,555 for an ounce.. if so they are still safe as an ounce is more than 30 grams and market price is more than 180,000!

salt wrote:Guys,

If the Gold price moves this way, it will have chaotic effect on some SL banks.
Sampath and PB are the riskiest among banks
LB Finance is riskiest among finance Companies

If market moves adversely ,
There will be huge pull out from Gold ETFs, it might speed up the process
Margin call on futures will cause forced selling

glad · 5 Re: Impact of Gold price on Banks Mon Apr 15, 2013 4:50 pm

glad

Senior Manager - Equity Analytics

Posts : 464
Equity Stars : 5219
Reputation : 11
Join date : 2011-07-05

A small percentage of the borrowers will want their jewels back for sentimental reasons. What steps will the Banks & Fin. cos take to handle this?

Rocky · 6 Re: Impact of Gold price on Banks Mon Apr 15, 2013 5:13 pm

Rocky

Senior Manager - Equity Analytics

Posts : 572
Equity Stars : 5700
Reputation : 73
Join date : 2011-02-01

glad wrote:A small percentage of the borrowers will want their jewels back for sentimental reasons. What steps will the Banks & Fin. cos take to handle this?

Banks are like Jews and Managers are stoics.
If people can pawn their GOLD to make a deal and ultimately make money, the banks have no feelings for the borrower.

So sentimentality and business do not go well.
Just as business and pleasure is not such a good idea.

dineshfernando · 7 Re: Impact of Gold price on Banks Mon Apr 15, 2013 7:49 pm

dineshfernando

Senior Manager - Equity Analytics

Posts : 573
Equity Stars : 5860
Reputation : 32
Join date : 2011-02-05

As far as I know the lending houses lend only 80% of the value of the gold. The value determined by them is also less than the market value. They are protected anyway.

The lending houses are very smart and they are prepared for such market cycles. The decline in Bullion market is temporary and it is an opportunity for some investors to make some money.

Present price for an ounce is US$ 1,398.

csetrader · 8 Re: Impact of Gold price on Banks Mon Apr 15, 2013 8:08 pm

csetrader

Stock Trader

Posts : 8
Equity Stars : 4279
Reputation : 0
Join date : 2012-09-06
Age : 40
Location : Moratuwa

agree with dinesh. this is a temporary set back. some of the foreign bank (SCB) heads were very confident in gold price will reach to US$1700 per ounce.

Redbulls · 9 Re: Impact of Gold price on Banks Mon Apr 15, 2013 8:22 pm

Redbulls

Director - Equity Analytics

Posts : 6053
Equity Stars : 16076
Reputation : 770
Join date : 2012-02-14

csetrader wrote:agree with dinesh. this is a temporary set back. some of the foreign bank (SCB) heads were very confident in gold price will reach to US$1700 per ounce.

http://forum.srilankaequity.com/t27420-socgen-gold-is-going-to-crash-to-1265-in-the-next-3-months

Rapaport · 10 Re: Impact of Gold price on Banks Mon Apr 15, 2013 8:32 pm

Rapaport

Assistant Vice President - Equity Analytics

Posts : 681
Equity Stars : 5742
Reputation : 55
Join date : 2011-02-01

It is interesting to note stagnation of the commodities and gold and on the other hand slow rise of the stock indices.

Looks like tables are turning.

If you think of the worst which can impact CSE are tea and rubber plantations, which can lose out in a commodity crash.

Interesting developments.

http://www.goldpricerate.com/english/gold-price-in-sri_lanka.php

Cheers!

Rapaport · 11 Re: Impact of Gold price on Banks Mon Apr 15, 2013 8:34 pm

Rapaport

Assistant Vice President - Equity Analytics

Posts : 681
Equity Stars : 5742
Reputation : 55
Join date : 2011-02-01

LFIN will get a big blow.

When it comes to money in these hard times, sentimental value will be neglected over gold available in the market at half price.

Not a good sign, entering murky waters

Cheers

worthiness · 12 Re: Impact of Gold price on Banks Tue Apr 16, 2013 6:04 am

worthiness

Senior Vice President - Equity Analytics

Posts : 2577
Equity Stars : 8952
Reputation : 115
Join date : 2011-04-08

As per above, present price of gold per ounce is US$ 1398. In the future, it shall reach to US$ 1700.
Anyone got forecast for the bottom line of gold demand & price before reaching to $ 1700 level.

Light of Hope · 13 Re: Impact of Gold price on Banks Tue Apr 16, 2013 7:15 am

Light of Hope

Vice President - Equity Analytics

Posts : 1014
Equity Stars : 5901
Reputation : 59
Join date : 2011-04-04

Thanks for pointing this out. It should be for a Sovereign. They offered 55,555 for 24k Sovereign.

OnlyGuru wrote:

Light of Hope wrote:True. there was a news in the papers few weeks back. Well, LB Finance offered 55,555 for a 24K ounce last year. who's gonna pay this back with interest when they can buy cheaper form the market now. They are in a crisis

Are you sure they offered 55,555 for an ounce.. if so they are still safe as an ounce is more than 30 grams and market price is more than 180,000!

salt wrote:Guys,

If the Gold price moves this way, it will have chaotic effect on some SL banks.
Sampath and PB are the riskiest among banks
LB Finance is riskiest among finance Companies

If market moves adversely ,
There will be huge pull out from Gold ETFs, it might speed up the process
Margin call on futures will cause forced selling

Light of Hope · 14 Re: Impact of Gold price on Banks Tue Apr 16, 2013 7:24 am

Light of Hope

Vice President - Equity Analytics

Posts : 1014
Equity Stars : 5901
Reputation : 59
Join date : 2011-04-04

How can we be sure it's temporary. Gold entered the bear phase, I think after about 8 years, my wild guess is that it could last years. Today in Bloomberg an expert said it could even reach USD 800 (I can't prove this). Nobody predicted a such a drop so fast

I got 47,500 for a gold(1 Sovereign) coin in January, when I add the high interest rate, I could buy a 1 Sovereign gold coin for a lesser price from the market soon. I might as well do it.

dineshfernando wrote:As far as I know the lending houses lend only 80% of the value of the gold. The value determined by them is also less than the market value. They are protected anyway.

The lending houses are very smart and they are prepared for such market cycles. The decline in Bullion market is temporary and it is an opportunity for some investors to make some money.

Present price for an ounce is US$ 1,398.

smallville · 15 Re: Impact of Gold price on Banks Tue Apr 16, 2013 8:33 am

smallville

Associate Director - Equity Analytics

Posts : 4119
Equity Stars : 10115
Reputation : 530
Join date : 2011-02-03
Location : Back on Earth

This is what Commodities guru Jim Rogers has to say abt Gold;

He told Business Insider there were four key things driving the sell-off.

1. India - The country hiked its gold import tax rate by 50% to 6% at the start of the year. This has curbed gold demand.

2. Chartists - Technical analysts that have warned that gold prices will continue to fall.

3. Cyprus - "Ms. Merkel is seeking re-election so she has told Cyprus and others that they should sell some of their gold to pay their debts. The Germans are tired of bailing people out and she needs to be tough."

4. Bitcoins - "The collapse of Bitcoin since most of them also own gold."

http://finance.yahoo.com/news/jim-rogers-said-expect-gold-180550281.html

smallville · 16 Re: Impact of Gold price on Banks Tue Apr 16, 2013 8:40 am

smallville

Associate Director - Equity Analytics

Posts : 4119
Equity Stars : 10115
Reputation : 530
Join date : 2011-02-03
Location : Back on Earth

OMG.. GOLD is a big selllllllllllllllllll

Impact of Gold price on Banks 5yr__210

Slstock · 17 Re: Impact of Gold price on Banks Tue Apr 16, 2013 6:39 pm

Slstock

Director - Equity Analytics

Posts : 6610
Equity Stars : 13383
Reputation : 1158
Join date : 2011-01-22

The gold loans are given for short term only ( mostly 3 months) . They usually use some risk management schemes as they know the volatility of it. Also interest is high while loan given is usually 10-20% less than market price. It might not be bad as we think if the management have studied and done their jobs correctly.

Rapaport wrote:LFIN will get a big blow.

When it comes to money in these hard times, sentimental value will be neglected over gold available in the market at half price.

Not a good sign, entering murky waters

Cheers

Sponsored content

Name*:
Phone number:
Email address*:
Comments*:
* - required fields	Learn

Name*:
Phone number:
Email address*:
Comments*:
* - required fields	Learn

Latest topics

Impact of Gold price on Banks

1 Impact of Gold price on Banks Mon Apr 15, 2013 3:48 pm

salt

2 Re: Impact of Gold price on Banks Mon Apr 15, 2013 4:09 pm

Light of Hope

3 Re: Impact of Gold price on Banks Mon Apr 15, 2013 4:12 pm

salt

4 Re: Impact of Gold price on Banks Mon Apr 15, 2013 4:42 pm

OnlyGuru

5 Re: Impact of Gold price on Banks Mon Apr 15, 2013 4:50 pm

glad

6 Re: Impact of Gold price on Banks Mon Apr 15, 2013 5:13 pm

Rocky

7 Re: Impact of Gold price on Banks Mon Apr 15, 2013 7:49 pm

dineshfernando

8 Re: Impact of Gold price on Banks Mon Apr 15, 2013 8:08 pm

csetrader

9 Re: Impact of Gold price on Banks Mon Apr 15, 2013 8:22 pm

Redbulls

10 Re: Impact of Gold price on Banks Mon Apr 15, 2013 8:32 pm

Rapaport

11 Re: Impact of Gold price on Banks Mon Apr 15, 2013 8:34 pm

Rapaport

12 Re: Impact of Gold price on Banks Tue Apr 16, 2013 6:04 am

worthiness

13 Re: Impact of Gold price on Banks Tue Apr 16, 2013 7:15 am

Light of Hope

14 Re: Impact of Gold price on Banks Tue Apr 16, 2013 7:24 am

Light of Hope

15 Re: Impact of Gold price on Banks Tue Apr 16, 2013 8:33 am

smallville

16 Re: Impact of Gold price on Banks Tue Apr 16, 2013 8:40 am

smallville

17 Re: Impact of Gold price on Banks Tue Apr 16, 2013 6:39 pm

Slstock

18 Re: Impact of Gold price on Banks

Sponsored content

New topics