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Feb 7 (Reuters) - J.P. Morgan Chase said on Monday it would accept physical gold as collateral with its counterparties as a growing number of clients look to use bullion as a hedge against inflation.
The bank, which is one of the custodians of physical metals for some of the world's largest precious-metal backed exchange-traded funds, said it would take gold as collateral to satisfy securities lending and repurchase obligations with counterparties. "Many clients are holding gold on their balance sheets as an inflation hedge and are looking to make these assets work for them as collateral," said John Rivett, collateral management executive for J.P. Morgan Worldwide Securities Services.
"By combining our collateral management and vaulting capabilities, we provide clients with greater flexibility in how they mobilise collateral." The spot gold price XAU=, which has fallen by some 4 percent so far this year to around $1,350 an ounce, rose by 30 percent last year, in large part thanks to investors seeking protection against rising inflation pressures in both developed and emerging economies.
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