Gold Investor

Pension plans in the United Kingdom are awaiting a ruling from their financial services industry regulator, the Financial Conduct Authority (FCA), on whether gold bullion will be added to its list of “standard assets”. The FCA defines standard assets as:

“...capable of being accurately and fairly valued on an ongoing basis, readily realized whenever required, up to a maximum of 30 days, and for an amount that can be reconciled with the previous valuation”...

Logically speaking, this should make the approval of gold a no brainer but the final FCA decision is expected later this year. Investment grade gold has been an allowed holding in self-invested personal pensions since 2006 but a positive ruling by the FCA should increase the awareness of available gold bullion investment, with the British investors.

From a related story by Bloomberg, it is clear that the investment demand for gold has declined over the last couple of decades as the increase in financialization has lead to numerous new investment products. But this demand (for investment grade gold) may once again be on the move up again.

"Gold remains a “niche” investment because only “very few people are aware that you can actually put physical gold into a pension fund,” O’Byrne said. Current allocations to bullion are “very low,” with 5.2 percent of GoldCore’s clients having gold in their pension funds, he said.

"...In 1980, 20 percent of investment funds were allocated to gold and today the figure is believed to be less than 2 or 3 percent,” O’Byrne said. “That shows that there is room for a significant rise in the demand for gold in pension funds and an increase in the overall allocations to gold within pension portfolios.”