Core Viewpoint - The global gold market is at a transformative juncture as the World Gold Council (WGC) plans to launch a digital gold unit called "Pooled Gold Interests" (PGI) in London in Q1 next year, aiming to create a new method for gold trading, settlement, and collateralization through digitization and trust structures [1][3] Group 1: Digital Gold Initiative - The London physical gold market, valued at $900 billion, may see the introduction of a third trading model that is neither "allocated" nor "unallocated" but a new, highly standardized digital rights certificate [3] - WGC CEO David Tait emphasizes that digitization is essential for expanding market coverage and integrating with modern financial infrastructure, transforming dormant gold assets into profitable collateral management tools [3][4] Group 2: Market Dynamics - Gold prices have doubled over the past three years, reaching a historic high recently, with institutions like UBS and Morgan Stanley predicting gold could challenge $4,000 per ounce by 2026 due to ongoing central bank purchases, geopolitical risks, and fluctuations in the dollar credit system [4] - In China, there is a growing enthusiasm among retail investors for gold, with various investment options becoming significant in asset allocation, indicating a potential for broader participation in gold investment through the upcoming digital gold [4] Group 3: Challenges Ahead - The primary resistance to digital gold comes from the market's inherent inertia, as traditional stakeholders in the London gold market are hesitant to change existing models, evidenced by the slow adoption of the blockchain-based "Bar Integrity Program" [5] - Some industry experts express concerns that gold may face competition from cryptocurrencies and stablecoins linked to traditional assets, highlighting the need for a balance between digitization and the physical attributes of gold [5]

Core Viewpoint - The World Gold Council plans to pilot "Pool Gold Interests" (PGIs) next year, allowing banks and investors to buy and sell fractional ownership of physical gold stored in independent accounts, aiming to digitize gold to expand market coverage [1][3]. Group 1: Digital Gold Initiative - The new digital unit PGIs will be tested in London in Q1 next year, with the goal of transforming the $900 billion physical gold market [1]. - The digitization of gold is seen as a way to utilize it for margin requirements and as collateral, moving away from its traditional role as a static, non-yielding asset on balance sheets [1][4]. - The initiative is part of a broader effort to create a new model for precious metal trading, settlement, and collateral [1]. Group 2: Market Dynamics and Challenges - The plan faces resistance from existing market participants who prioritize gold's physical characteristics and view it as a safe-haven asset [2][6]. - The London wholesale gold market, dominated by major banks, currently operates under two trading types: allocated and unallocated gold trading, with the PGIs proposal introducing a third type [5]. - The gold market is also facing competition from cryptocurrencies and stablecoins, with previous attempts to create gold-backed stablecoins largely unsuccessful [6]. Group 3: Industry Support and Adoption - Major banks and trading companies are expected to participate as co-owners of the underlying gold in the pilot project [4]. - The World Gold Council's previous blockchain initiative, the "Gold Bar Integrity Program," has seen good acceptance among refineries, with 96% of compliant refineries joining [7]. - The CEO of the London Bullion Market Association acknowledges the challenges but believes in the potential for significant changes in gold procurement processes [7].