In early 2026, international gold prices experienced a sharp decline after a rapid surge, with the spot price hitting the brakes after reaching a high of $5,500 per ounce. This extreme volatility prompted a market-wide reassessment of the stability of traditional safe-haven assets. Against this backdrop, the pace of implementation and strategic choices regarding the pilot program allowing insurance funds to invest in gold have drawn significant attention.
In fact, since regulators opened the pilot program for insurance fund investment in gold in February 2025, 4 out of the 10 approved insurers have still not become members of the Shanghai Gold Exchange. Even those who have entered the market have not established large-scale positions, indicating an overall cautious and measured approach.
From an industry perspective, while gold, as a non-interest-bearing asset, can effectively alleviate the "asset shortage" and act as a hedge against inflation, its complex pricing mechanism and high volatility demand stronger investment research and risk management capabilities from insurers. Industry analysis suggests that despite short-term operational challenges, gold's role as a low-correlation asset could still play a significant part in insurance fund portfolios over the long run.
The insurance capital is entering the market with caution. On February 7, 2025, the National Financial Regulatory Administration issued the "Notice on Launching the Pilot Program for Insurance Fund Investment in Gold" (hereinafter referred to as the "Notice"), formally permitting 10 pilot insurers, including PICC P&C, China Life Insurance, Taiping Life Insurance, Sinosure, Ping An P&C, Ping An Life Insurance, CPIC P&C, CPIC Life Insurance, Taikang Life Insurance, and New China Life Insurance, to invest in gold.
Based on the "Notice's" stipulation that "the total book balance of gold investments shall not exceed 1% of the company's total assets at the end of the previous quarter," this policy theoretically opened a potential inflow of nearly 200 billion yuan into the gold market.
Although gold has long been a sought-after safe-haven asset in the market, insurance institutions have shown distinct prudence regarding direct participation in gold investment.
According to information from the Shanghai Gold Exchange, as of February 2, 2026, among the ten pilot participants, six insurers—PICC P&C, China Life Insurance, Ping An Life Insurance, CPIC Life Insurance, Taikang Life Insurance, and Taiping Life Insurance—have officially become exchange members, while four pilot institutions have not.
Furthermore, it is understood that several pilot insurance institutions have not begun large-scale position building, indicating a generally restrained investment pace.
Industry insiders indicate that the progress of the gold investment pilot is influenced not only by external market conditions but also depends heavily on the internal asset management capabilities built by the insurance companies.
The "Notice" imposes strict requirements on business approval procedures, staffing for relevant positions, investment management systems, and operational system development. Gold involves various complex businesses like physical contracts, deferred settlement, and leasing, which also demand a high level of risk management proficiency. The ten institutions in the first pilot batch are all leading or highly representative large groups within the industry, possessing mature global asset allocation perspectives and risk control resources. Even so, there are noticeable differences in their progress.
Zhou Jin, a financial industry consulting partner at Baker Tilly, pointed out that the strict limits on investment positions in the pilot rules reflect a prudent regulatory stance. Gold is an investment category with complex risks and professional barriers; its pricing is heavily influenced by international political and economic factors. It does not generate predictable interest income directly, relying solely on price appreciation for profit, which requires patient observation and timing of trades. On the other hand, companies need time to gradually develop and perfect the investment research and trading capabilities specific to gold investments.
Based on this assessment, Zhou Jin predicts that requirements for institutional access will be advanced steadily, further widening the gap between leading institutions and smaller to mid-sized ones.
A chief non-bank financial analyst at a securities firm noted that in the absence of substantial business experience, the risk control team likely becomes the direct embodiment of core competitiveness for insurers, large and small. Even the risk control teams at leading insurers are still in a phase of摸索 (exploration) regarding their ability to judge gold price trends.
High volatility tests the stable nature of insurance funds. It is understood that the purpose of launching the pilot program for insurance fund investment in gold is to broaden the channels for utilizing insurance funds, optimize the structure of insurance asset allocation, and promote improved asset-liability management for insurance companies.
Particularly in an environment characterized by both low interest rates and an asset shortage, gold is entrusted with long-term allocation expectations for risk diversification and inflation hedging. However, its high price volatility also poses greater challenges for insurance funds, which are renowned for their stability.
At the beginning of 2026, the international gold market experienced extreme swings, from a historic surge to a cliff-like plunge, presenting a rare roller-coaster ride.
Early in the year, driven by factors such as escalating geopolitical risks, gold prices started from around $4,300 per ounce and hit a historic peak of $5,595 on January 29, with a monthly increase approaching 30%. However, the market frenzy came to an abrupt halt on January 30. By February 2, 2026, spot gold had once fallen below $4,500 per ounce, with an intraday maximum drop exceeding 8.00%.
This extreme volatility poses certain challenges for insurance funds that pursue absolute returns and stable growth.
The aforementioned analyst indicated that the volatility of gold assets has been amplified by recent market conditions, which, to some extent, diminishes its value in the context of insurance fund allocation. Since gold remains a "non-mainstream" asset class for insurer investments, and investment experience is still limited, insurers tend to be more cautious when investing in such assets.
From the asset side perspective, sharp fluctuations in gold prices can impact the stability of insurance companies' net asset values. Although the "Notice" limits the total gold book balance to no more than 1% of the company's total assets—a relatively low cap—considering the overall size of insurance funds, floating profits or losses generated by tens of billions of yuan in fund positions during gold price turbulence can significantly affect insurers' monthly or quarterly financial performance.
The analyst further analyzed that during the decision-making process of an insurer's investment committee regarding highly volatile assets like gold, the price of gold itself may have already experienced substantial fluctuations, posing challenges to the timeliness of decisions.
Xu Gaolin, an associate professor at the School of Insurance of the University of International Business and Economics, pointed out that one cannot rule out the possibility that some companies or funds might engage in market-timing during specific market phases to capture short-term speculative opportunities. However, during periods of暴涨暴跌 (violent fluctuations) in gold prices, only highly skilled speculators are likely to profit consistently.
Gold may become a regular allocation category for insurance funds. Despite short-term caution in allocation, from a long-term perspective, the strategic value of gold in insurance fund asset allocation is being re-evaluated.
Zhou Jin analyzed that the regulatory purpose of allowing insurance fund investment in gold is to broaden the scope of insurance fund utilization, enrich the variety of configurable products, alleviate the current asset shortage dilemma, and help the insurance industry achieve better asset-liability matching for cycle-spanning investment and operation.
Although gold is a non-interest-bearing asset, it is a high-quality safe-haven asset with functions of hedging against inflation and preserving/appreciating value, making it suitable for the cycle-spanning asset allocation needs of insurance funds.
Xu Gaolin vividly invoked Warren Buffett's viewpoint, noting that while gold is a "non-laying chicken," the inflation targets of global central banks and the complex reality of external inflation objectively cause gold to appreciate continuously.
The aforementioned analyst expressed a similar view, stating that the "spread loss" refers to the difference between the investment return rate and the comprehensive liability cost, which is not necessarily linked to whether an asset is "interest-bearing." The value of allocating gold lies in its low correlation with mainstream assets.
A relevant responsible person from Ping An Life Insurance stated that since the pilot program was opened, the company has highly valued the role of gold as a major asset class in portfolio allocation and has actively promoted various tasks related to gold business. On one hand, gold possesses good investment value in the current global market environment; on the other hand, from a portfolio perspective, increasing gold allocation helps diversify risk and reduce volatility.
The person emphasized that Ping An Life Insurance will, within the scope permitted by regulators, adhere to the principles of stable allocation and controllable risk, continuously improve the investment research system and infrastructure for gold business, and constantly optimize diversified asset allocation.
However, allocation does not equate to blind purchasing. Xu Gaolin mentioned that due to high liability ratios and leverage, the overall requirement for insurance funds is "stable money, stable investment"—meaning the yield must be sufficiently high, long-lasting, and stable.
The National Financial Regulatory Administration clearly stated in the "Notice" that pilot insurance companies' investment in gold business should aim for "medium to long-term asset allocation." This wording establishes the positioning of insurance capital as "patient capital" in the gold market, determining that its operations must be based on long-cycle value assessment rather than short-term speculation.
The analyst pointed out that for most of history, gold's volatility has remained at relatively low levels, and its correlation with core insurance allocation assets like stocks and bonds is low. It even exhibits a certain negative correlation with stock/bond performance during specific periods, making it a tool for diversifying investment risk.
Looking ahead, the industry generally believes that regulators will steadily advance institutional access during the opening-up process. This deliberate "slowness" in pace is essentially for the "steadiness" of business development.
The analyst judges that, given the current significant volatility in the gold market, it is unlikely that regulators will密集推出 (intensively roll out) policy arrangements regarding insurance fund investment in gold. It is also highly probable that they will not tighten the conduct of this business while the market scale remains small. From a medium to long-term perspective, assuming gold price fluctuations return to a long-term steady state, gold may become a常规配置品种 (regular allocation category) for insurance funds.
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