Gold spot of bother: Little sparkle for financiers despite tailwinds

Increased competition, lower spreads, moderate growth are among hurdles to overcome

Gold prices hit record high in the third week of March as fears of bank collapses and high inflation led investors to the traditional safe haven. Gold prices are often inversely correlated to dollar strength because the international price is dollar-denominated.

The Federal Reserve’s (Fed’s) stance indicates that the dollar may appreciate further since it is prepared to keep pushing up policy rates. But demand for gold is also up – the World Gold Council claims central banks are buying in addition to private demand. 

The macro-situation plus the price trends could have interesting effects on gold-loan non-banking finance companies