YOU HAVE no doubt heard about the record-breaking year that gold is having. At the time of writing, it is up 27% in dollar terms. If you were to ask why it’s performing so well, you would be given a very standard line that involved the phrases: central banks, inflation, interest rates, and geopolitical unrest. But they all point to one thing, and that’s… uncertainty.
Dave Russell, CEO, GoldCore Ltd
People, institutions, and central banks place their money into gold because they know that it is one of the few assets you can be certain of when investing in uncertain times – and nothing is more uncertain than the future. That’s why we are seeing increasing interest from those looking to hold gold in their pensions.
Investing in a self-directed pension can be challenging. After all, pensions are designed for the future and the long term, so it’s essential to be well-diversified and prepared for potential uncertainties. In a market where assets like bonds, equities, and property increasingly move in tandem, finding effective diversifiers is difficult. This is where gold stands out. It has a low correlation with equities and other risk assets, and its inverse relationship with these assets becomes more pronounced when they start to depreciate.
This dynamic is even more evident over the long term. Gold has consistently proven its ability to safeguard the value of a portfolio and offer protection against risks in the financial system. It has performed exceptionally well during five of the last seven recessions. According to data from the World Gold Council, gold enhances the risk-adjusted returns of portfolios and has consistently delivered positive returns. We view it as an asset with dual benefits: it provides both returns and stability, bringing balance to a portfolio.
Additionally, gold’s liquidity is an important factor to consider. The metal can be easily sold, which is reassuring during periods of market turmoil. With over $180bn of gold traded daily, it offers a level of liquidity unmatched by many other assets. The market’s size and depth allow it to accommodate investors of all sizes, including central banks and institutional investors – something many other financial assets favoured by pension providers may not offer.
For Irish pension holders, allocating a portion of their pension to gold could provide a layer of security and stability that is hard to find with other investments. Holding gold, as well as silver, in an Irish pension is straightforward. GoldCore works with various pension providers to help clients include investment-grade bullion in their self-directed pensions. For 21 years, we have assisted individuals in protecting their futures against inflation, recession, and other uncertainties.
