Andrew Maguire addresses speculation around the LBMA’s attempt to avoid the sting of Basel III rules.

Andrew Maguire believes the impact of Basel III rules on the London Bullion Market Association (LBMA) is unquestionable. According to the precious metals expert, despite their persistent attempts, the LBMA will not escape the effects of the new rules on June 28th 2021.

Basel III delay for LBMA?

At the close of Q2 this year, Basel III will make unallocated gold trading impossibly expensive, with market makers experiencing an 85% haircut on each trade. With tens of thousands of tonnes of fractionally-held gold and silver cleared every year in the London market it’s no surprise that, as Andrew Maguire put it, the LBMA fought “tooth and nail” to obtain an exemption.

Upon citing Covid-19 disruption as justification, the LBMA has been granted a 6-month delay before Basel III rules directly affect day-to-day trading. However, Andrew Maguire believes the key player in the Loco London market will feel the sting of Basel III long before 2022.

Watch Andrew Maguire talk gold and silver price expectations for Q1 and Q2 201 in the last’s week’s fortnightly Kinesis show ‘Live from the Vault’.

Watch this week’s Live from the Vault for:

  • BREAKING NEWS – Exclusive update on Basel III.
  • January volatility explained – bullish conditions ahead.
  • GLD and SLV – the paper market’s Achilles heel.
  • Latest on Basel III impact on gold and silver price.

EU and Swiss Basel III implementation

Andrew Maguire predicts Switzerland and the European Union’s adoption of Basel III rules in June, will expose the LBMA to these new standards despite the sanctioned delay.

As the primary global physical trading hubs and refineries are centred in Switzerland and Europe, in Andrew Maguire’s opinion, the LBMA cannot completely escape the marketwide effects of this historic ruling. Additionally, all market-making LBMA bullion banks also have a physical presence in the EU and Switzerland.

As Andrew Maguire sees it, the inseparable relationship between these pivotal bullion markets and the LBMA means there is no avoiding the impact of Basel III. The precious metals expert believes the new rules will still impact the hundreds of tonnes of unallocated gold cleared each day in the London market.

What will this mean for the LBMA?

In Andrew Maguire’s opinion, the differing regulation in the markets will open up a massive arbitrage opportunity, at the current diluted unallocated gold prices. Additionally, Andrew Maguire anticipates that LBMA banks, exposed to EU and Swiss compliance, will lose the ability to endlessly shuffle paper markets positions for settlement.

As the implications of Basel III hit the market, the long-time wholesaler predicts a significantly higher gold and silver price into the second quarter of 2021. A prediction only strengthened by the industry-shifting information involving several major European banks and Basel III rules, Andrew Maguire revealed in this week’s episode of Live from the Vault.


 

This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD holds steady near 1.0850 ahead of Eurozone PMIs

EUR/USD holds steady near 1.0850 ahead of Eurozone PMIs

EUR/USD oscillates near 1.0850 in the early European session on Wednesday, flirting with two-week lows. The pair turns cautious ahead of preliminary Eurozone PMI data while the US Dollar faces fresh selling amid the USD/JPY slide. US PMIs eyed as well. 

EUR/USD News

GBP/USD remains pressured below 1.2900, UK/ US PMIs eyed

GBP/USD remains pressured below 1.2900, UK/ US PMIs eyed

GBP/USD remains under pressure below 1.2900 early Wednesday. Broad risk-aversion offsets the USD/JPY decline-driven US Dollar weakness, rendering negative for the pair. The focus now shifts to the UK and US S&P Global PMI readings. 

GBP/USD News

Gold stays hopeful above $2,400, as US PMI data loom

Gold stays hopeful above $2,400, as US PMI data loom

Gold price is looking to build on the previous rebound above $2,400 in Asian trading on Wednesday, despite a buoyant tone seen around the US Dollar and the US Treasury bond yields. Gold traders now look forward to the global preliminary business PMI data for fresh trading impetus.  

Gold News

PEPE price poised for a rally after retesting trendline support

PEPE price poised for a rally after retesting trendline support

PEPE price broke out of a descending channel pattern, surging by 12%, but is experiencing a corrective pullback, trading 2.3% lower at $0.0000121 as of Wednesday. 

Read more

Bank of Canada: Rate cut expected; forward guidance eyed

Bank of Canada: Rate cut expected; forward guidance eyed

The Bank of Canada will take centre stage at 13:45 GMT. Alongside the rate decision, the central bank will deliver the rate statement and the Monetary Policy Report, released quarterly and providing investors with a glimpse of what the central bank expects in Q3.

Read more

Majors

Cryptocurrencies

Signatures