l-r: David Gornall, Edel Tully
"Today, there is a strong case for gold to be included in the HQLA list,” state David Gornall (LBMA Consultant) and Edel Tully (Director of Financial Services, LBMA) in collaboration with World Gold Council as they make their case for gold as a level 1 High-Quality Liquid Asset (HQLA) in their SUERF Policy Brief. This follows the analysis of Professor Dirk Baur that supports gold's qualification as a HQLA. “Recent market events have shown that many investors already utilise gold as a liquidity buffer as it has proven to be an asset that performs well during financial stress events (World Gold Council, 2025),” they assert in the Brief.
“During 2023, the gold market saw increased gold bar and coin purchases, stable and liquid futures markets, increased central bank purchases and an increase in OTC volumes. Investors use gold as a liquidity asset because it can be easily traded and valued and is widely accessible through different market access points. The two biggest attributes for an investor are gold’s negative correlation with risky assets and the overall trust factor gold holds. Altogether, this creates a very broad investor base and a large and diversified group of asset holders which is greater than that of many HQLA assets. The evidence from the data suggests that the volatility of gold compares favourably to other level 1 HQLAs. The perception held by some regulators that gold is too volatile for inclusion as a level 1 asset are shown to be incorrect."