Daily Market Update

Swiss Government Pension Fund To Buy Gold Bars Worth Some €600 Million

Swiss Government Pension Fund Allocating 2% Of Pension Fund To Gold Bars

via IPE Quest

The Swiss government pension fund, Switzerland’s AHV/AVS fund, has decided to diversify into physical gold bars in their substantial CHF35.2bn (€30.5bn) pension portfolio.

At the end of last week the first pillar buffer fund tendered a custodianship and storage for CHF 700m (EUR 600m / USD 700m / GBP 525m) in gold bars via IPE Quest.

The bars are to be stored in Switzerland either collectively or individually, the tender (QN-2447) states.

The tender marks a shift in the investment strategy for AHV/AVS, as it previously only invested in gold and silver via swaps.

“The supervisory board has decided we are to invest in physical gold bars from now on,” the fund told IPE in a statement.

In 2016 the supervisory board of the buffer fund decided to raise its the commodities exposure from 1% to 2% while divesting from energy-related commodity exposure.

The fund explained last year that gold was better suited to add “diversification and hedging in certain situations (inflation or recession)” than the previously preferred energy commodities.

In March the investment committee confirmed the decision to change the precious metal mandate from swaps to physical gold.

The fund told IPE: “The mandate has not been changed yet. The investment committee asked for the change to be implemented by year-end 2018.”

No further details were given on the mandate or the shift in strategy.

As per March 2018, the fund held CHF682m in gold and a minor investment in silver, with a target allocation to precious metals of 2%.

This means by year-end the swaps exposure to silver would have to be phased out and the precious metal portfolio would consist of physical gold only.

Switzerland remains one of the safest jurisdictions in which to own gold. Find out why in our Essential Guide to Gold in Switzerland here

News and Commentary

 

Gold inches up on weaker dollar (Reuters)

N. American gold ETF outflows up in May – World Gold Council (Reuters)

Perth Mint’s May gold sales dip to lowest in over 1 yr, silver sales up  (Reuters)

Mongolia’s central bank launches campaign to increase gold reserves (Xinhua Net)

London house prices to fall this year (City AM)


Source: Texasbulliondepository.gov

Swiss government social insurance pension fund buys gold bars (IPE.com)

Texas Bullion Depository – America’s first state-administered precious metals depository opens in Texas (Dallas News)

BIS intervention in gold remained steady in May (BIS.org)

New Swiss banking system based on ‘sovereign money’ would be progress (Bloomberg)

Which should you buy – bitcoin or bitcoin cash? (Moneyweek)

Gold Prices (LBMA AM)

06 Jun: USD 1,295.25, GBP 964.57 & EUR 1,101.48 per ounce
05 Jun: USD 1,292.25, GBP 966.73 & EUR 1,105.13 per ounce
04 Jun: USD 1,294.65, GBP 966.46 & EUR 1,103.82 per ounce
01 Jun: USD 1,299.15, GBP 976.83 & EUR 1,111.42 per ounce
31 May: USD 1,303.50, GBP 978.54 & EUR 1,113.58 per ounce
30 May: USD 1,298.60, GBP 979.27 & EUR 1,119.26 per ounce
29 May: USD 1,302.05, GBP 983.83 & EUR 1,130.57 per ounce

Silver Prices (LBMA)

06 Jun: USD 16.55, GBP 12.33 & EUR 14.06 per ounce
05 Jun: USD 16.39, GBP 12.26 & EUR 14.03 per ounce
04 Jun: USD 16.44, GBP 12.29 & EUR 14.03 per ounce
01 Jun: USD 16.42, GBP 12.32 & EUR 14.02 per ounce
31 May: USD 16.55, GBP 12.42 & EUR 14.17 per ounce
30 May: USD 16.37, GBP 12.33 & EUR 14.08 per ounce
29 May: USD 16.48, GBP 12.43 & EUR 14.26 per ounce


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Mark O'Byrne
Executive Director

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