Will Gold Become a Tier 1 HQLA Currency on July 1, 2025?

Four nines fine standard 400 oz gold bars. Photo: Chepry. Wiki commons. Used with permission.

Will Gold Become a Tier 1 HQLA Currency on July 1, 2025?
 
There’s been a lot of chatter online about a Basel III change effective July 1, 2025, when gold allegedly moves from a Tier 3 to a Tier 1 asset. According to both ChatGPT and Google AI, this would drive a “surge in demand for physical gold.” All artificial intelligence platforms warn that AI can make mistakes. So, is this earthshattering event really happening or not?
 
At the top of this blog, I want to stress in the most clear way possible that two of the most trusted, independent organizations in the gold space, The World Gold Council and the London Bullion Market Association, are both denying this. According to the LBMA, “There have been inaccurate reports online that gold will be reclassified as Tier 1 HQLA (High Quality Liquid Asset) under Basel III as of July 1, 2025. This information is not correct; no official announcement has been made or is expected on gold gaining HQLA status.”
 
Of course, even when rumors are untrue, they can spark a frenzy. So, will investors pile into gold over the next few days? Why is gold down -6.4% over the last two weeks?
 
Here are the things I’ll cover in this blog.
 
How Did Artificial Intelligence Get It So Wrong
Hallmarks and Red Flags of Scams.
The World’s Top Holders of Gold
Is There a Physical Gold Rush?
Breaking the U.S. Dollar’s Grip on the Global Reserve Currency
The Return of the Gold Standard
The Volatility of Gold
 
And here is more information on each topic.
 
How Did Artificial Intelligence Get It So Wrong
Any of us who have had our virtual assistant AutoCorrect to silly (or even obscene) words knows that artificial intelligence can get it wrong. In the case of the inaccurate reporting about gold becoming a Tier 1 currency, which is wrong, the data that both ChatGPT and Google AI were relying upon were from gold bug websites, not from respected data providers. In other words, the source data was inaccurate and those providing the misinformation had money to gain from it going viral.
 
The sophisticated analyst will know how to look for the source data and determine whether it is provided by an unbiased independent provider or by an opportunistic marketing campaign, that could in fact be predatory. However, many Main Street investors might have a more difficult time discerning the difference. For now, it's very important to verify what AI says before acting on the information. This tip came from someone in our community. We’re always grateful when you reach out to inform us and we are able to issue an Investor Alert.
 
Hallmarks and Red Flags of Scams.
Whenever I see a deadline that encourages people to act now or lose out, that’s a neon red flag. If we must act before XYZ date or the world ends or we lose all our money, that is actually a warning that predatory marketers have their claws in us. Yes, of course, there can be certain events that are scheduled to happen on XYZ date. However, most will be known about well in advance, particularly if they are as game changing as moving gold to a Tier 1 currency. We know the exact dates that the Bureau of Economic Analysis will release the monthly GDP reports about a year in advance. We also know when the FOMC meetings will occur, and which ones will contain the Summary of Economic Projections – a year in advance.
 
Another red flag is when the website or person providing the data has a track record of problems with the SEC or is based out of Florida or Texas. (Both are homestead states where some assets are protected from lawsuits). FINRA.org and the SEC offer BrokerChecks. However, some fraudsters can slip through the cracks by simply setting up a new company.

The World’s Top Holders of Gold
So, who are the top holders of gold in the world? Are countries stockpiling and hoarding it? Below is a list of the top 20 biggest holders of gold in the world, along with whether they are increasing or decreasing their gold holdings. Black means that the holdings have remained the same this year, while blue indicates an increase and red indicates a decrease in holdings.

Source: World Gold Council. Gold.org.

The U.S. is the top holder of gold in the world by far. The holdings have remained constant for years.
 
Is There a Physical Gold Rush?
As you can see above, Main Street ETF investors are very interested in gold and have increased their holdings, pushing the price up. China, India, Turkey, Poland and Taiwan also increased their holdings, while Russia and Uzbekistan sold some gold.
 
Gold prices hit an all-time high of $3,509.90/ounce on June 13, 2025. As I mentioned at the top of this blog, gold is down -6.4% from that all-time high. Gold has been the top performing investment so far in 2025, with gains of 23% year to date. Silver has also been spectacular, with gains of 21%. By comparison:

• Bitcoin is up 14.8%,
• The Magnificent 7 has gained 6.5%,
• The S&P500 is up 5.2%, and,
• The Dow Jones Industrial Average has posted a weak performance of 3.4%.

 
(The underperformance of the DJIA is one of the reasons why we are using value substitutions in our sample Wealth Plan pie charts.) The S&P500 hit a record high on June 27, 2025, making headlines. However, that milestone doesn’t reveal the real story so far this year.

Breaking the U.S. Dollar’s Grip on the Global Reserve Currency
The BRICS currency is designed to break the dollar’s dominance as the global reserve currency. The countries promoting this currency have made that quite clear. Is it working? As I indicated in prior blogs, there are many reasons why the world, outside of Brazil, Russia, India, China, and South Africa, doesn’t yet trust the BRICS currency.
 
Over the past two decades, the dollar has slipped from 71% of the global currency to 57.3% of the allocated reserves. That mostly has to do with the launch of the euro in 1999. The dollar is still dominant, followed by the euro. Learn more in my Global Reserve Currency blog.  

The BRICS currency isn’t really held outside of the five-country alliance. The Chinese yuan is slightly more popular, but it is still just 2% of the allocated foreign exchange reserves. China’s economy is large and growing. However, safety, trust and liquidity remain concerns. The Index of Economic Freedom considers China to be a repressed economy.
 
The Return of the Gold Standard
There is far too much debt in the world for there to be a return of the gold standard. It would be impossible for the supply to meet that demand anytime soon. The World Gold Council and the London Bullion Market Association would love to see gold as a Tier 1 HQLA currency, and lobby for that constantly. While the gold market is highly liquid at this time, we have seen periods where it was quite a frozen market and stuck at very low prices. In fact, there was a quarter of a century between the highs of 1980 and about 2005, when gold was stuck in a trading pattern of $350/ounce, down about 56% from the high of $800 in 1980.
 

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The Volatility of Gold
Gold has been volatile more recently, as well. On Sept. 5, 2011, gold hit a high of $1,920/ounce. It dropped to the $1200 range in 2013 and to $1000 in 2015, down by almost half. Gold didn’t come back to the 2011 highs until the pandemic (2020).
 
It is important for gold bugs to understand that precious metals are an emotional investment. During frenzies (which happened in 2011 and in 1980), many people get caught buying high, before a period of prolonged weakness. Most of us can’t afford to lose half of our wealth for a decade. It makes life very difficult and could even cost us our home.
 
However, there is a difference between all and nothing. As you can see in our sample pie charts, it’s a good idea to lean into hot investments – within reason. If we’re interested in gold, silver or Bitcoin (perceived safe havens from a weak economy or dollar), consider these assets as “at-risk” investments in our age-appropriate, diversified wealth plan. The pie chart system with regularly balancing will help to keep us on the right side of the trade, prompting us to capture gains at the high and buy more low if we hit a period of weakness. This is a lot better than just riding the rollercoaster of prices of this precious metal, and it is certainly better than betting the entire farm on it.
 
Full disclosure: I’m leaning into silver in my personal hot slices.
 
Bottom Line
Gold is not going to become a Tier 1 HQLA reserve currency on July 1, 2025. However, it is certainly popular, particularly with Main Street investors around the world. The future for gold could continue to be bright because of the level of concern over elevated debt and leverage in the world and a weakening dollar.
 
Stocks and real estate have remained strong and are at historic highs. If we hit weakness in stocks or if housing prices start to fall, we could see even more people interested in gold, Bitcoin and gold’s sibling, silver. Recessions do occur, although it’s been quite a while since we had a real one. (We borrowed our way out of a recession during the pandemic with trillions of dollars.) At the beginning of the recession, gold and silver prices typically drop with stocks. However, there is a point when they decouple and soar. This historic trend makes a case for using the pie chart format for our precious metal holdings.
 

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Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. Natalie is the bestselling author of The ABCs of Money (6th edition) and The Power of 8 Billion: It's Up to Us, and is the co-creator of the Earth Gratitude Project. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). Her book The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 6th edition of The ABCs of Money and the 2nd edition of Put Your Money Where Your Heart Is (2nd edition) are the most recent releases of these books. Follow her on Instagram. 
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Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly-traded companies, funds or projects mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect an age-appropriate, diversified wealth plan, which has been designed strategically, with the assistance of financial professionals who are familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge, patience and diversified strategy.  
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Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument.