As financial institutions scramble for gold ahead of Basel III’s full implementation in July 2025, the Basel Committee has reaffirmed its commitment to enforcing the framework in full, consistently, and as soon as possible. This comes as the global banking sector faces heightened counterparty credit risk and seeks to strengthen supervisory effectiveness following the 2023 banking turmoil.

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The new regulations will tighten capital requirements, limit leverage, and elevate gold to Tier 1 collateral, reinforcing its role in stabilizing bank balance sheets. Banks’ interconnections with non-bank financial intermediaries (NBFIs) remain a concern, with data gaps complicating risk measurement. Supervisors are now focused on addressing vulnerabilities in counterparty credit risk management, a response to recent distress in NBFIs.

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As U.S. banks work to comply, many are repatriating gold reserves to shore up liquidity. The broader financial sector’s adaptation to these changes—amid persistent economic uncertainty—is fueling further demand for physical gold, with markets closely watching the impact on liquidity, stability, and global monetary policy.

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