JPMorgan Chase will accept gold for securities lending and obligations that pertain to repossessions since more clients are investing in the precious metal as a method of hedging inflation or to serve as collateral, as disclosed by MF Global Holdings.
"The announcement should be slightly positive for gold prices, as it further grows the belief that gold is a currency and has more uses than simply acting as a safe haven or portfolio diversifier," according to a Tuesday report by Chicago-based analyst Tom Pawlicki of MF Global.
Just after 9 a.m., gold futures were up 1.05 percent, a $14.10 increase to $1,362.30 per troy ounce while silver also was up 1.11 percent, a 0.327 increase to $29.670 per troy ounce.
"It may also prompt owners of gold who use it as collateral to become long-term holders of the metal, rather than trading in and out of it," according to Pawlicki. "A greater long-term commitment from them may keep the metal off the physical market."
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