You may have noticed recently that gold headlines have been spinning one very specific claim: that on July 1st, 2025, gold will be reclassified as a Tier 1 High Quality Liquid Asset (HQLA) under Basel III rules.
Sounds monumental, doesn’t it? The kind of thing that justifies gold’s rally. The kind of policy shift that would finally give gold its long-overdue respect in the modern financial system.
There’s just one problem: it’s not true.
What’s Actually Going On?
Let’s clarify something upfront. Gold has already been a Tier 1 asset since 1988 under Basel I. Allocated gold, held in a bank’s own vault, is treated as having a 0% risk weighting, that is the same as cash. That hasn’t changed.
But HQLA (High Quality Liquid Asset) isn’t about capital risk. It’s about liquidity coverage. And that’s where the confusion starts.
Some have mistaken gold’s Tier 1 capital status for a pending upgrade to Level 1 HQLA. They are not the same thing. HQLA rules were introduced in Basel III to ensure banks can meet short-term funding needs in a crisis. They include assets like government bonds and central bank reserves. Not gold.
The LBMA recently put out a statement to correct this confusion: no announcement has been made, and none is expected. Gold is not becoming Level 1 HQLA in July.
Jan Skoyles's latest GoldCoreTV episode covers all of this in full detail. She discusses what Basel III really says about gold, and why the HQLA debate reveals more about the fragility of the modern financial system than you might think.
About the author
David Russell
GoldCore
David is the CEO of GoldCore.
Until Summer 2023 he was the Director of Marketing and Communications, responsible for all marketing and communications strategies and branding.
David joined GoldCore in 2008 as Director of Business Development and later took over as Director of Marketing and Communications in 2020.
Prior to this Dave managed and operated his own Marketing Agency and completed multiple coaching qualifications.
"Working for GoldCore gives you a fantastic lens through which to view global financial and geopolitical developments. I am very proud to be part of a company that contributes to increasing investors understanding of these developments."
When he’s not at work, David is passionate about sailing and has completed the ‘Round Ireland Yacht Race’ twice.