How much gold should an institution hold?

There is no single answer, and EONA does not give investment advice or suggest allocations. Take your own professional advice.

Isn’t gold too volatile for institutional portfolios?

Gold’s price does fluctuate, sometimes sharply. Its correlation with other assets has historically been low over long periods, but this changes over time and is not guaranteed.

What’s the difference between holding gold via ETF and via EONA?

An ETF gives you units in a fund that holds gold. With EONA, you buy physical metal recorded against specific bars and stored with Loomis in Dubai, so you are not relying on an ETF issuer.

Can allocated gold meet institutional liquidity needs?

With EONA, you can sell your metal back to EONA at the price shown on the platform, and proceeds are paid to your verified bank account. EONA does not currently offer physical withdrawal.

Gold and Diversification

Q: What about jurisdictional risk?

All metal bought through EONA is stored with Loomis in Dubai. Zurich and Singapore are planned locations (coming soon) and are not currently available.

Diversification is a long-standing principle: avoid depending on a single market or outcome.

Equities, bonds and other assets can become more correlated during crises. In 2022, for example, both equity and bond markets posted losses at the same time — an unusual breakdown in conventional diversification.

Gold is often discussed as a diversifier because its price has historically moved differently from many financial assets. It doesn’t depend on earnings or on a borrower repaying. But it is not immune to losses, and its correlation with other assets changes over time.

Gold’s Role in Diversification

Correlation and Downside

Gold has sometimes held up when other assets fell. In 2008, gold rose about 5% over the year while equities fell sharply, and in 2020 gold reached new highs. It also fell at times during both episodes.

Unlike equities or bonds, gold has no issuer and pays no income. It is a physical asset rather than a promise to pay.

Long-Term Behaviour

Gold is not an income-producing asset. Over some long periods it has held its value against many currencies; over others it has fallen in real terms. Past performance is not a reliable guide to the future.

How much, if any, an institution holds is a decision for the institution and its advisers. EONA does not give investment advice.

Allocated vs Synthetic Exposure

Why Allocation Matters

Paper gold products (such as ETFs, futures and unallocated accounts) may offer convenience but carry different risks, such as reliance on an issuer or counterparty.

Allocated gold is recorded against specific bars. With EONA, your holding is recorded against specific bar serial numbers and separately from EONA’s own assets.

Storage

With EONA, all metal is stored with Loomis in Dubai. Zurich and Singapore are planned locations (coming soon) and are not currently available.

Regulatory and Risk Considerations

Regulatory focus on stress-testing has increased interest in how different assets behave under pressure. How rules treat gold depends on the type of institution and the regulator.

Risk committees should consider gold’s own price volatility alongside any diversification benefit.

Conclusion

Diversification is about managing risk, not removing it. Allocated gold has a long history as part of diversified holdings, but it can fall in value and produces no income. EONA sells physical precious metals on an execution-only basis and does not give investment advice.