Gold is an increasingly important asset for European pension funds, with new research showing many funds intend to increase their holdings of the yellow metal in the coming months.

A survey of 150 European pension funds with combined assets of over US$200bn under management found three-quarters of them expect to increase their allocation to gold over the next 12 months.

On the other side, 5% of the surveyed funds predicted they will reduce their weighting to the precious metal.

Of those planning to increase their gold weighting, 75% said that the reason was that it has become easier and less expensive to invest in thanks to more gold exchange-traded products on the market, and 73% said it was gold offers increasingly attractive diversification benefits for investors.

Most of them (71%) also said that gold is a good hedge as the US dollar falls in value and as an inflation hedge (67%), while 13% of the funds said that it was due to the rising price of gold due to improving fundamentals.

The study was commissioned by Global Palladium Fund exchange-traded commodities, which were established by MMC Norilsk Nickel and distributed and promoted by NTree International. The six GPF ETCs, copper, nickel, silver, gold, platinum and palladium, have listings on the LSE, Deutsche Börse and Borsa Italiana and SIX Swiss Exchange.