NETHERLANDS - The Stichting Pensioenfonds Vereenigde Glasfabrieken (SPVG) has been told to reduce its holdings in gold after the Nederlandsche Bank (DNB) ruled its exposure to the metal was too risky.
The Dutch glassmaking plant's pension fund currently has a 13% holding in gold, but has been ordered to reduce this to between 1-3% by the Dutch regulator.
SPVG purchased gold in 2008 to protect against the euro uncertainty caused by a rising concern about the public finances, the crisis, euro zone and the high monetary inflation, said the fund. Since then, the price of gold has increased from $600 per ounce to over $1,000.
The regulator fears that a decline in price could hinder the fund's solvency ratio. SPVG has 85% of its assets invested in fixed income AAA-rated government bonds which are mostly domestic or German.
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