Gold Market Challenged by Scotiabank’s Shutdown of Metals Business

SEATTLE (Scrap Monster): The Canadian Bank of Nova Scotia (Scotiabank) announced its decision to wind down its metal business. The move is expected to pose challenges to gold market.

For several years, the bank had been the world’s biggest lender to the physical precious metals industry, with more than 100 staff at various offices spread across the globe. In 2018, after a strategic review of the business, the bank had decided to sell the business, but failed to find a buyer. Following this the bank significantly downsized the business. The metals business currently has only 15 employees, as compared with around 140 five years back. The news release by the bank states that the entire metals business activities will come to an end by early-2021.

The closing down of the metals business is likely to impact global gold market. The bank has been playing key role along with others in accurate daily gold price recovery for the past several years. With the exit of the bank, there are chances for spot gold prices to become less reliable. The bank had an active role in settling gold trades and was also an active participant in daily gold price auctions.

Meantime, Scotiabank declined to comment on the development.

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