We’ve learned from several insurance companies that the first batch of gold transactions in the insurance industry has recently been completed, marking the official entry of China’s insurance funds into the gold market.

Among these, PICC Property & Casualty completed the first gold auction transaction by a domestic insurance institution at the Shanghai Gold Exchange; China Life completed the first gold inquiry transaction; Ping An Life completed the first Shanghai Gold pricing transaction; and China Taiping Life Insurance completed the first large-scale spot gold transaction.

In February of this year, the National Administration of Financial Regulation issued the “Notice on Launching a Pilot Program for Insurance Funds’ Investment in Gold,” stating that, in order to broaden channels for the use of insurance funds, optimize the structure of insurance asset allocation, and promote insurance companies’ enhancement of their asset-liability management capabilities, the Administration has decided to launch a pilot program for insurance funds’ investment in gold.

There are a total of 10 pilot insurance companies. The scope of gold investments under the pilot program includes physical gold spot contracts listed or traded on the main board of the Shanghai Gold Exchange, gold spot deferred delivery contracts, Shanghai Gold Central Pricing Contracts, gold spot quote contracts, gold quote-based swap contracts, and gold lending services.

China Life Insurance stated that gold investment helps broaden channels for the use of insurance funds, optimize the structure of insurance asset allocation, and further enhance insurers’ capabilities in asset-liability management and broad-asset-class allocation.

PICC Property & Casualty stated that the entry of insurance funds will inject more long-term, stable capital into China’s gold market, helping to expand the market size, enhance the liquidity and maturity of the RMB-denominated gold market, and strengthen China’s gold market’s influence on a global scale.