Pension funds in the Netherlands, the US, Britain and Australia have kept 2% to 5% of their assets in gold for five to six years, a World Gold Council report shows. They hold it because government bonds no longer reliably rise when stocks fall.
At a glance
- Dutch fund Pensioenfonds PDN cut its government bonds by 10% to build a 5% gold holding in 2020-21.
- US Treasuries have moved in the same direction as stocks since 2022, weakening their role as a hedge.
- Some funds hold physical gold, while others, such as Fairfax County and Now: Pensions, use futures.
Background
Pension funds have long paired shares with government bonds, because bond prices usually rose when stocks fell. That opposite movement, called a negative correlation, cushions a portfolio in a sell-off. The World Gold Council (WGC) is the gold industry's market development body, and it regularly studies how central banks and investors use the metal.
What the report found
The World Gold Council on Thursday published case studies of four pension funds that hold gold. None of them is a new buyer. Most built their positions between 2020 and 2021 and have kept between 2% and 5% of assets in gold since then.
The Netherlands' €7.7 billion Pensioenfonds PDN bought gold from October 2020 to April 2021 to reach 5%. In the US, Fairfax County Retirement Systems holds about 3% of its $6.2 billion portfolio in gold futures. Britain's Now: Pensions holds about 2% in futures, and Australia's NGS Super about 3%.
Why bonds are no longer enough
The main reason is a change in how bonds behave. US Treasuries have moved in the same direction as stocks since 2022, so they no longer reliably cushion a fall in shares. Gold's link to stocks has been steadier, the council said, and it has tended to move against them in severe sell-offs.
PDN's case shows the thinking. A 2020 study found gold could lower portfolio risk without cutting expected returns. German bond yields were below zero at the time, and pandemic spending was raising fears of inflation. PDN cut its bond holdings by 10% and put half of that money into physical gold.
What it means
The funds prefer bullion to mining shares because it avoids company risks such as permits, operations and politics. Gold has more than doubled since early 2022 even as US bond yields climbed, breaking an old pattern in which higher yields held gold back.
The report sets no standard allocation. Each fund sized its holding to its own funding, rules and risk limits. What they share is staying power: positions opened in the pandemic are still in place five or six years later.
Our read
Outlook: bullish. Pension funds that hold gold for years give the metal a steady base of demand. These are existing positions, though, so the report signals support rather than fresh buying.
What to watch
- Whether US Treasuries and stocks keep moving together, which would strengthen the case these funds describe.
- New disclosures of gold holdings from larger public pension funds.
For information only, not investment advice.
Gold price in India
metalscost.com India reference price as of 2026-10-24.
Detailed analysis
Demand Drivers
Pension funds hold 2-5% in gold to diversify as bonds lose their hedging power.
Inflation
Several funds bought gold in 2020-21 as pandemic stimulus raised inflation fears.
Interest Rates
Gold has more than doubled since early 2022 even as US bond yields rose.
What could lift prices
- Bonds moving with stocks since 2022 strengthens the case for gold as a diversifier.
- Pension funds tend to hold for years, giving gold steady long-term demand.
What could weigh on prices
- The case studies describe existing holdings, not fresh buying.
- Allocations of 2-5% are small, which limits how much demand pension funds add.
Country impact
| Country | Impact | Reason |
|---|---|---|
| Netherlands | Low | PDN holds the largest allocation in the study, at 5% of its assets. |
| United States | Low | Fairfax County holds about 3% of its portfolio in gold futures. |
| United Kingdom | Low | Now: Pensions holds about 2% in gold futures inside its alternatives portfolio. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Investment and Wealth Management | Positive | The report gives other funds a template for using gold as a diversifier. |
Who gains, who loses
- Long-term gold holders: Pension funds add a steady, patient source of demand.
- Government bond markets: Funds like PDN cut bond holdings to pay for their gold.
Other ways this could play out
- If bonds start moving against stocks again, pension funds may see less need to hold gold.
- If more large funds adopt similar allocations, institutional demand for gold could grow.
Price risks
- A return of the old bond-stock pattern would weaken the main reason these funds hold gold.
- Pension funds could trim gold holdings to rebalance after its large price gains.
Technical view
Price is trading below both its 20-period and 50-period moving averages, a bearish alignment.
Computed from metalscost.com's own stored price history.
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