Why Gold Loan Stocks are Falling

Somatirtha

Gold loan stocks are sliding as gold prices retreat sharply from recent highs.

Falling gold prices reduce collateral value, increasing risk for lenders like Muthoot Finance.

Investors fear shrinking loan margins as lower gold rates cut borrowing potential significantly.

RBI’s upcoming tighter guidelines for gold loans have also triggered regulatory anxiety.

Market sentiment turned cautious as NBFCs brace for stricter prudential lending norms.

Profit-booking after a strong rally in gold added pressure on these stocks.

A stronger dollar and easing global tensions reduced demand for safe-haven gold.

Manappuram and Muthoot shares fell up to five percent amid broad investor sell-off.

Analysts expect recovery only if gold stabilises and RBI norms stay moderate.

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