This summer, a little-understood law will change the gold market for good.

No one is talking about it. Yet, gold demand is already soaring as a result. Big banks are buying at record highs to get ahead of the shift.

That has driven gold prices higher by more than 20% this year... while the S&P 500 Index is down around 9%.

And the upgrade we're about to see for gold in the U.S. banking system shows this gold bull market still has plenty of room to run.

It all comes down to an obscure financial provision that will go into effect this July...

One Reason Why the Gold Price Is Rising

Today, gold is considered a "Tier 3" asset in the U.S.

This tier is the lowest-quality capital on a bank's balance sheet. And it's considered just as risky as debt instruments like mortgage-backed securities or derivatives.

Essentially, gold is seen as a risky form of capital that could lose value. That's why banks have to hold extra capital on their books against specific kinds of gold holdings.

It's a crazy situation. For example, as long as gold is designated as Tier 3, central banks mark it on their books at 50% of the actual value.

Basel III is set to change that.

The Basel III accord was published in the wake of the financial crisis. It set up international requirements to make sure banks had enough capital on hand to cover defaults and reduce risk.

For many countries, Basel III went into effect in 2012.

Now, it will begin in the U.S. this year. And this major shift in the banking code will reset the rules for gold...

When it takes effect on July 1, gold will go from Tier 3 to Tier 1 status. It will be viewed as essentially a "no risk" asset, considered equal to both cash and high-quality government bonds.

Simply put, banks will no longer have to hold extra capital to support their gold holdings. And banks will be able to have gold on their books at 100% of the market value.

Most folks have never heard of Basel III. But banks around the world are well aware that it's coming.

They're already taking advantage of this change. All this institutional buying is driving the gold boom higher.

You see, while stocks around the world have been crashing, gold has been soaring. It's currently hitting all-time highs while the world frets over what will come next with tariffs. Take a look...

Gold was soaring before tariffs crashed the global stock market. And while the metal did take a dip during the initial panic, it has quickly catapulted back to new all-time highs.

The Basell III regulation change will only increase the institutional demand for gold... which will continue to drive the gold bull market that's underway.

Simply put, yes, gold is at new all-time highs... But we're firmly in the middle innings of this trend. And the final euphoric run higher is still ahead of us.

Tomorrow, I'll share another reason why I'm sure of that. And it's another reason why buying gold today is still a smart move.

Good investing,

Chris Igou