With retail investors owning close to 40 000 t of gold, valued at about $2-trillion, the World Gold Council (WGC) aims to set the bar for product providers across the global retail gold market and further encourage retail investors to place their trust in gold through the publication of its Retail Gold Investment Principles (RGIPs).
The RGIPs are intended to provide high-level, best practice principles for providers of all kinds of retail gold investment products and, through their adoption, ensure the highest levels of fairness, transparency and integrity are instilled across the market.
“It is envisaged that the adoption of best practices will lead to greater trust, benefitting customers and product providers alike, creating value and driving demand across the industry,” the council comments.
Released on August 5, the RGIPs are a set of “globally recognised standards that create clarity and consistency where it is lacking and reinforce trust across the gold value chain”.
Through working with governments, international agencies and policymakers to develop policies that reduce barriers and improve access to gold, the council has created a set of principles for the retail gold market which will, over time, be supported by more detailed implementation guidance.
The 36-page document covers various topics under each of the seven principles: fairness and integrity, transparency, protection of client assets, responsible gold sourcing, regulatory compliance, commercial prudence and operational professionalism.
The investment market currently comprises many ways to invest in gold, but the WGC says the vast majority of retail gold investments are held in unregulated products, including traditional bars, coins and investment jewellery, as well as numismatics, gold pension and savings plans and tokenised gold.
While products such as exchange-traded funds are subject to financial market regulation, many other gold investment products are not, and the WGC says that, over time, this has held back retail investment in gold and is something that needs to be dealt with.
In addition, the council also published an updated Retail Gold Investment Investor Guidance, which has been broadened to further educate investors on the range of investment models for retail gold products and includes a summary of the RGIPs and what these should mean from an investor’s perspective.