Why Some Institutions Look Beyond Equities and Bonds
Traditional equity-bond mixes have faced challenges in recent years. Inflation has reduced real values, and simultaneous falls in stocks and bonds in 2022 showed that diversification between them does not always work.
Some institutions — from pension funds to family offices — have responded by looking at real assets, including gold. Gold is usually seen as a complement to traditional assets rather than a replacement, and it carries its own price risk.
How Gold Is Commonly Described
Gold is often described as:
- A diversifier — historically low correlation to equities and bonds over long periods, though this varies
- A store of value — with a long history, although its value can fall for extended periods
- A possible hedge — it has sometimes held value during currency weakness, inflation or geopolitical shocks, but not consistently
- A widely traded asset — with deep global markets
Research published by the World Gold Council and others discusses gold’s role in diversified holdings. Any decision about how much to hold depends on the institution’s goals, liabilities and risk appetite, and on professional advice. EONA does not give investment advice.
From Exposure to Ownership: Allocated Gold
Paper instruments (ETFs, futures) give exposure to the gold price but rely on an issuer or counterparty.
Allocated physical gold means:
- Recorded ownership of specific bars (not a claim on pooled reserves)
- Independent checks of vault stock
- A clear way to sell — with EONA, back to EONA at a disclosed price
With EONA, holdings are recorded against specific bar serial numbers and stored with Loomis in Dubai. The vault operator, Loomis, maintains insurance under its own policy.
How Institutions Use Gold
Institutions describe several uses for allocated gold:
- Reserves Management: Holding part of reserves in gold rather than a single currency
- Long-Term Holding: Holding gold alongside other assets over long periods
- Risk Frameworks: Including gold in volatility-based frameworks
- Stress Scenarios: Considering how gold might behave in market extremes — which is uncertain
EONA offers allocated physical gold with prices based on the international spot price plus a premium, with a commission, stored with Loomis in Dubai. EONA sells on an execution-only basis: the decision about whether and how much to holdis always yours.