Lenders are actively monitoring gold price volatility, prompting them to ask borrowers for additional gold collateral or partial principal repayment when loan-to-value (LTV) thresholds are breached, particularly for loans disbursed in February.
The Association of Gold Loan Companies on Monday said it had advised members to reduce their maximum lending rate following the decline in the price of the yellow metal.
Gold prices fell to a 5-year low of less than $1,100/ounce.
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