Gold reserve asset management
It is widely recognised that the functional purposes for why monetary authorities hold gold differ from commercial entities, and current accounting practices do not reflect this. This lack of an appropriate accounting treatment has meant monetary authorities have adopted a variety of different methods, some of which can act as a barrier to investing in gold. Following interest for some form of standardisation in this area, draft recommended guidance has been written and the World Gold Council is now calling for interested parties to submit their feedback on the guidance by 31 July 2017.
As central banks search for new investments, our analysis shows that gold compares extremely favourably to other traditional reserve assets with respect to safety, liquidity and return.
The 2016 Executive Programme in Gold Reserves Management took place at the University of Cambridge Judge Business School in September. Leading the programme were distinguished scholars from Cambridge, experts from the World Gold Council, leading gold industry insiders, and policymakers from both central banks and international institutions.
If you are interested in attending the programme in the future, please email us.
The past few years have seen a fundamental shift in central banks' behaviour with respect to gold. Since 2010, they have been net buyers of gold, driven in part by uncertainty over the future of the international monetary systems and the need to diversify reserves.
Gold can help central bank officials to manage market risk, improve portfolio performance and preserve national wealth.
How the market works
The gold market operates through a well-established infrastructure of market makers and clearing. Gold trading, clearing and vaulting is determined around a number of clearly-defined standards.
View a short film on how gold is traded by gold market makers.