A leading figure from the World Gold Council recently stated that gold's primary purpose is for preservation, not speculation. During a forum focused on high-quality gold industry development in Gansu, Wang Lixin, the China CEO of the World Gold Council, used this phrase to summarize his core argument for gold investment. He then introduced a key concept: in a multipolar era, gold's role is evolving from a simple safe-haven asset to a "new foundation" for wealth allocation.
Why has gold's price repeatedly set historical highs over the past three years?
Wang Lixin attributed this to three fundamental underlying logics beyond short-term factors. He described the current period as a transformation for a new human era, citing three primary changes: shifts in social structures, changes in economic operating models, and a major transformation of the post-war international political and economic order. It is within this great transformation that gold's irreplaceable value has become prominent.
Assessing uncertainty is a key prerequisite for gold investment.
Wang Lixin further advised against viewing gold as a short-term financial instrument. Instead, it should be seen as a new foundational asset for a new multipolar era. Addressing the significant volatility of international gold prices, which fell from their early-year highs, he offered his observation: despite increased short-term fluctuations and frequency, investors should maintain a long-term perspective. He presented data showing that from 2007 to the present, the average annual return on gold priced in Renminbi is approximately 10%. During this same period, while China's economy grew, its GDP growth rate slowed, and the yield on 10-year government bonds also declined. This, he argued, represents a fundamental change in the economic model, where gold can provide stable, long-term returns in a new normal of low interest rates and slower growth. He acknowledged that gold's short-term volatility is not insignificant, with an average annualized volatility of around 16% and extreme fluctuations exceeding 30% occurring multiple times, often during sharp price rises or extreme events. However, he emphasized that when the time horizon is extended to five or ten years, gold's performance remains outstanding.
Global institutional allocation to gold is increasing.
Wang Lixin revealed that global institutional investor allocation to gold has consistently increased over the past decade, a crucial factor supporting demand for gold investment. He noted that this trend is often "under the surface and not widely understood." He calculated for the audience that domestic institutions manage nearly 200 trillion RMB in assets, with only a small fraction currently open to gold investment. Following international standards, he suggested there is significant theoretical room for increasing gold's proportion in asset allocation. In the public fund sector, over 100 funds have a long-term allocation to gold. Among "gold-plus" products with an allocation of over 5%, 68 funds allocate between 5% and 10%, while 10 funds allocate between 10% and 30%. He mentioned one internationally renowned asset management company's RMB fund registered in China, which allocates 10% to 30% to gold and has performed remarkably well over the past two years. The breakthrough in the insurance sector is particularly noteworthy. In 2025, the National Financial Regulatory Administration officially approved 10 insurance companies to pilot gold investments, allowing them to invest up to 1% of their total assets in products like Shanghai Gold Exchange AU9999. Within a year, six insurers have become members of the Shanghai Gold Exchange, seven have begun deploying investments, and some early movers have reported very pleasing returns.
Gold as a strategic anchor in a changing world.
Concluding his remarks, Wang Lixin used a vivid analogy to summarize gold's positioning: "Gold is the new foundation in a multipolar era, the bedrock of family wealth, a safeguard for assets, the base of a lighthouse in a storm, and the foundation on a wealth highway." He offered three key judgments: It is crucial to allocate gold as a strategic foundation in a multipolar era, but one should not dwell on short-term fluctuations, though volatility will increase and investors must be prepared; Chinese institutional investors are just beginning their gold allocation, as are global institutional investors; and looking through volatility to see returns, gold's long-term value has never faded.
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