What type of gold exposure do sovereign funds prefer — physical or financial?

Practices vary. Some prefer allocated physical gold for direct ownership and transparency; others use ETFs or futures for flexibility. Each has different costs and risks.

How much gold do sovereign funds hold?

It varies widely by mandate, and many hold little or none. There is no standard allocation, and EONA does not give investment advice.

Is gold consistent with ESG mandates?

It depends on how the gold is sourced. EONA’s bars are investment-grade bars from Emirates Minting Factory, an RJC-certified UAE refinery, approved under EONA’s supply-chain due diligence policy.

Where is gold bought through EONA stored?

With Loomis in Dubai. Zurich and Singapore are planned locations (coming soon) and are not currently available.

Does gold reduce risk?

Gold has historically had low correlation with equities and bonds over long periods, which is why it is used for diversification. But it has its own price risk, and that correlation can change.

Gold in Sovereign Wealth Funds

Strategic Objectives of SWFs

Sovereign wealth funds manage national assets for long-term purposes such as fiscal stabilisation and saving for future generations. Some consider gold because it has no issuer credit risk and is recognised globally, though its price can be volatile and it produces no income.

Historical Allocation Trends

Traditionally, SWFs focused on equities, fixed income and alternative assets like private equity and real estate. Concerns about inflation, currency weakness and political instability have led some long-term investors to look again at real assets, including gold.

Public information on individual funds’ gold holdings is limited, but general trends include:

Central banks have been significant net buyers of gold in recent years, according to the World Gold Council.
Some long-term public investors have discussed real assets as a response to inflation uncertainty.
Approaches differ widely: many large funds hold little or no physical gold.

Why Gold Is Discussed for SWF Mandates

1. Long History as a Store of Value

Gold has a long history as a store of value. Unlike bonds, it is not tied to the solvency of any issuer — but its value can fall, sometimes for long periods.

2. Inflation

Gold has sometimes held its value during periods of monetary expansion and inflation, but the relationship has not been consistent over time.

3. Geopolitics

Gold is not issued by any government and is accepted globally. Where it is stored still matters, because stored metal remains subject to the laws of that location.

4. Liquidity

Unlike real estate or infrastructure, gold is traded in deep global markets. Its price can still move sharply, and it is influenced by currencies, interest rates and investor sentiment.

Implementation: Challenges and Solutions

Holding allocated physical gold involves practical questions — where it is stored, how ownership is recorded, and how it can be sold.

For institutions buying through EONA:

Holdings are allocated and recorded against specific bars (not pooled exposure)
Metal is stored with Loomis, an independent vault operator, in Dubai
Zurich and Singapore are planned locations (coming soon) and are not currently available
Prices are based on the international spot price plus a premium, with a commission — see our Fees & Spread page

EONA sells physical precious metals on an execution-only basis and does not give investment advice.