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HSBC Lost US0 Million in Gold Trading from freemexy's blog

May 18th from WikiFX news. According to US media, HSBC lost around US$200 million within one day in March, much exceeding the maximum loss estimated by HSBC‘s risk value model and costing a whole year’s total gain in gold trading.To get more news about WikiFX, you can visit wikifx official website.

  In other words, HSBC lost a whole years gold-trading profit within just one day.

  The loss has largely been due to the extremity in March, as the lockdown measures cut off material golds supply channel around the globe. Price gap between New York gold futures and London spot gold hit a record high of US$70.

  In general, the spread between spot gold and futures is no more than a few dollars per ounce. Banks usually sell gold futures in New York as a way to of hedging for the positions in the London market, and a significant variation of prices in the two markets will cause them heavy losses.

  According to HSBC, the loss due gold‘s market value was attributed to challenges gold refinement and transportation.As spot-gold trading expanded unprecedentedly, this affected HSBC’s gold leasing and financing businesses, as well as other hedging activities, leading to a loss.

  HSBC is not the only institution that suffered from gold markets unusual volatility. The long-established Bank of Nova Scotia in Canada also closed precious metal trading department in March, allegedly for the same reason.

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