The decline of structured gold deposits

With the recent volatility in gold prices, the expected yields of structural gold deposits offered by multiple banks have decreased. What are the reasons behind this? Is it still possible to allocate funds to these products? The recent downward trend in gold prices is the direct cause for the decrease in expected yields. The volatility and uncertainty in the direction of gold prices have led banks to actively lower the expected yields of linked products in order to control their own risks. Operational pressures are another important reason for adjustments, as maintaining higher interest rates for structural deposits will increase the liability costs for banks. When it comes to allocation, gold structural deposits are more suitable as a part of low-risk asset allocation. In the current environment where there is a divergence in expected gold prices, investors should fully understand the cost of capital, triggering conditions for returns, and the design of return ranges. At the same time, they should realize that the high-end yields of products are not guaranteed to be realized and should lower their expectations for high returns.