ECB considers gold markets as source of risk to financial stability

Economists at the European Central Bank (ECB) say that gold markets could endanger the financial stability of the eurozone in the event of a geopolitical crisis. Experts claim the greatest threat is posed by demand for physical settlements, the dominance of large traders, and non-transparent transactions.

In the context of possible crisis events, these features of the precious metal market may put pressure on the region's financial stability, according to economists. ECB specialists also emphasize the risks associated with leverage and over-the-counter derivatives.

Additionally, the central bank warns of potential liquidity and margin requirement issues. These problems could spread to the entire financial system in the future. Supply problems with physical gold could also increase the likelihood of a market squeeze.