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Bank of Nova Scotia to Close Metals Business
April 29, 2020 - (Gold Market Wire) -Bank of Nova Scotia, aka Scotiabank, will close its (mostly precious) metals business, Reuters has reported. The Bank became a strong presence in the Gold market when, in 1997, it purchased Mocatta Metals, one of the oldest corporations in the world, with roots going back to 1671.
A market maker and one of the largest lenders to the metals industry, Bank of Nova Scotia tried for years to find a buyer for its metals business, without success.
In 2017, the company was tainted by loans it made to a company called Elemental, NTR Metals, a Florida based concern, which was accused of laundering illicitly derived gold mined in South America. Bank of Nova Scotia/ScotiaBank and Scotia Mocatta were never formally accused in the matter.
The shutdown of Bank of Nova Scotia's metals business will drain liquidity away from the international gold market and further concentrate the wholesale trade of precious metals in the hands of JP Morgan and HSBC, the two largest banks operating in the market. Accurate price discovery in the metals market, already hampered by the Covid-19 crisis, which has caused supply and shipping interruptions of physical gold, will likely further contract as a result.