Gold sits outside the conventional asset class framework. It pays no dividend, yields no interest, and has no cash flows to discount. Yet institutional investors, central banks, and sophisticated individuals have held it for centuries as a store of value, a hedge against tail risk, and a diversifier against paper currency debasement.
For high-net-worth investors in 2026 — many of whom hold wealth across multiple currencies and jurisdictions — gold deserves a considered allocation. The question is not simply whether to hold it, but in what form, where to store it, and how it fits into a broader portfolio.
Why HNW Investors Hold Gold
Inflation hedge: Gold has historically maintained purchasing power over very long periods. In the short to medium term, the correlation with inflation is imperfect — gold can underperform inflation for years before reasserting its real value. As a long-run store of value, its track record is unmatched.
Safe haven in systemic crises: During periods of geopolitical stress, financial system instability, or significant market dislocation, gold typically appreciates as investors seek assets outside the banking system. The 2008 financial crisis, the 2020 pandemic, and the 2022 Russia-Ukraine conflict all saw gold perform well relative to risk assets.
Portfolio diversification: Gold's correlation with equities and bonds is generally low and sometimes negative — particularly during equity market selloffs. Adding a modest gold allocation (typically 5-10%) to a traditional 60/40 portfolio has historically improved risk-adjusted returns.
Currency protection: Gold is priced in US dollars globally, so it provides a natural hedge against dollar weakness. For investors holding significant USD assets, gold provides some offsetting exposure. For non-US investors, gold also fluctuates with USD/local currency movements — a weaker pound means sterling-priced gold rises even if USD gold prices are flat.
Counterparty-free asset: Physical gold held outside the banking system (in a vault) carries no counterparty risk. It is one of the few assets that is simultaneously nobody else's liability. In an environment where trust in financial institutions is periodically tested, this is meaningful.
Forms of Gold Investment
Physical Gold — Coins and Bars
Physical gold means you own the metal directly. Key formats include:
Investment-grade coins: UK Britannia and Sovereign coins are both CGT-exempt (as they are legal tender) — a significant advantage for UK investors. Other popular coins include the South African Krugerrand, Canadian Maple Leaf, and American Eagle. These are priced at a small premium to the gold spot price.
Gold bars: Available from 1g to 400oz (the standard "Good Delivery" bar weighing approximately 12.4kg). Larger bars have lower premiums over spot price but are less liquid and divisible. LBMA-approved refiners include Rand Refinery, Valcambi, Argor-Heraeus, and the Perth Mint — buying from an LBMA-approved refiner ensures quality and facilitates future resale.
Ownership and storage of physical gold involves costs: insurance, vault fees (typically 0.1-0.5% of value annually at reputable facilities), and the bid-offer spread on purchase and sale.
Gold ETFs and Exchange-Traded Commodities (ETCs)
Gold ETFs and ETCs are exchange-listed products that track the gold price, typically by holding physical gold bullion in a vault. The largest products globally include SPDR Gold Shares (GLD) and iShares Physical Gold ETC. They offer:
- Easy trading at low cost (dealing charges plus an ongoing fee of typically 0.1-0.25%/year)
- No storage or insurance responsibility for the investor
- High liquidity
- The ability to hold within an ISA (certain products) or SIPP
UK CGT note: Gold ETCs are not UK legal tender, so unlike Britannia coins, they are subject to CGT on disposal. However, they can be held within an ISA or SIPP where gains are sheltered.
The counterparty consideration: with ETCs, you rely on the custodian holding the underlying gold. Major products are backed by allocated, audited physical gold, but you are not the direct legal owner — you hold a security.
Gold Mining Equities
Shares in gold mining companies provide leveraged exposure to the gold price — when gold rises, mining company profits can rise faster (and when gold falls, they can fall faster). They also carry company-specific risk: management quality, mine geology, political risk in the country of operation, hedging policy. Many HNW investors prefer physical or ETF exposure to avoid stock-picking risk.
Gold Futures and CFDs
Futures contracts allow investors to buy or sell gold at a future date at a price agreed today. They are used primarily by sophisticated investors for hedging or speculation. Futures require margin, carry rollover costs, and are not appropriate for long-term buy-and-hold allocation. CFDs (Contracts for Difference) offer similar leveraged exposure but are retail products with significant risk.
Gold Savings Accounts
Some banks and specialist providers offer gold savings accounts, where you hold gold in small, fractional amounts through the bank's system. These offer convenience but typically come with higher fees and are generally less suitable for significant allocations.
UK Capital Gains Tax on Gold
For UK-resident investors:
Gold coins that are UK legal tender (Sovereign, Britannia) are exempt from CGT entirely. This is a significant advantage — gains can be crystallised, coins held indefinitely, and no reporting obligation arises on disposal.
Other gold (bars, foreign coins, gold ETCs/ETFs) is subject to standard CGT rates: 18% for basic rate taxpayers and 24% for higher/additional rate taxpayers (as of 2026 rates). The annual CGT exempt amount (£3,000 from 2024/25) shelters modest gains. Gold held within an ISA or SIPP is sheltered from CGT.
Non-UK residents selling UK-based gold assets — including ETCs held with a UK broker — should take advice on whether Non-Resident CGT applies, though physical gold stored outside the UK is generally not a UK-sited asset.
Offshore Gold Storage
For significant gold holdings, offshore storage in specialist vaults outside the UK banking system is worth considering:
Singapore: One of the world's leading physical gold storage centres. Singapore does not levy GST on investment gold, and the country's political stability, rule of law, and independent custody facilities make it attractive for long-term wealth preservation.
Switzerland: Home to major LBMA refiners and globally respected private vaults (Geneva Freeport, Zurich private banks). Switzerland has a long tradition of precious metals custody and strong property rights.
Dubai: Emerging as a gold storage hub, with the DMCC (Dubai Multi Commodities Centre) operating the Dubai Gold and Commodities Exchange.
When storing gold abroad, ensure you hold allocated, segregated gold (your specific bars are identified as yours, not commingled with other investors' gold). The provider should be independently audited. For UK tax purposes, the location of physical gold affects IHT siting. From 6 April 2025, UK IHT is residence-based rather than domicile-based: individuals who are long-term UK residents (broadly, resident in the UK for 10 or more of the last 20 tax years) are liable to IHT on their worldwide assets regardless of where the gold is stored. For those who are not long-term UK residents, non-UK-sited assets (including gold held in offshore vaults) fall outside UK IHT. Always take specialist advice, as the transitional rules and the precise definition of long-term UK resident are complex.
Recommended Allocation
There is no universal answer, but institutional practice suggests 5-10% of a diversified portfolio in gold is typical for investors seeking genuine diversification and tail-risk protection. Some wealth preservation mandates run higher (10-15%), while growth-oriented portfolios may hold less (3-5%).
Gold does not "compound" — it does not generate income — so holding too much permanently reduces the growth potential of a portfolio. The case for gold is strongest when:
- You are concerned about systemic financial risk or currency debasement
- You want a genuine non-correlated asset
- You have a meaningful time horizon and are not reliant on income from the gold holding
- You hold wealth across multiple currencies and want a globally recognised store of value
How Global Investments Can Help
Global Investments advises internationally mobile clients on portfolio construction across traditional and real assets, including gold. We can help you assess what role gold should play in your overall wealth strategy, identify the most appropriate vehicle (physical, ETF, or offshore custody), and ensure your holding is structured efficiently for your tax position. Speak to our investment team to discuss how gold fits your situation.
This article is for general information only and does not constitute financial advice or a recommendation to invest in any asset. All investments, including gold, can fall as well as rise in value. Past performance is not a guide to future results. Tax treatment depends on individual circumstances and may change.
This article is for general information only and does not constitute financial, legal or tax advice. Rules, prices and regulations change; verify current requirements with a qualified adviser before acting.