Family office gold strategy.

Why gold in a family office portfolio

Family offices have returned to gold with conviction over the past three years. The reasons are structural: dollar debasement concerns following the largest peacetime monetary expansion in history; the weaponisation of the SWIFT system demonstrating that reserve assets held in foreign currency can be frozen; central bank gold accumulation running at its highest levels since 1967; and geopolitical fragmentation creating demand for assets that are simultaneously portable, liquid, and beyond the reach of any single government.

Gold allocation targets among single-family offices have migrated from the traditional 2–5% of portfolio toward 8–15% for families with meaningful exposure to geopolitical risk or currency depreciation concerns. Multi-family offices and wealth managers serving HNWIs in the Gulf, Southeast Asia, and emerging market jurisdictions are seeing similar demand.

ETF versus physical

Gold ETFs (SPDR Gold Shares, iShares Gold Trust, and regional equivalents) offer ease of trading, low cost, and no custody burden. For liquid portfolio positions intended to be bought and sold on exchange, they are appropriate. For wealth preservation, generational transfer, or as a hedge against systemic risk, they are not.

The critical limitation of gold ETFs is counterparty risk. The ETF holds allocated gold in custody — but the custody chain involves the fund, the custodian (typically HSBC or JPMorgan), and sub-custodians in multiple jurisdictions. In a genuine systemic crisis, the scenario in which gold is most valuable, the legal and operational certainty of ETF redemption in physical form is uncertain. Every ETF prospectus reserves the right to settle redemptions in cash. Physical gold held in your custody or in allocated vault storage does not.

Family offices with serious wealth preservation mandates hold physical gold — in allocated vault storage (Brinks, Malca-Amit, Via Mat), in private vault, or (for smaller proportions) in possession. The rest of their gold allocation may be in ETFs or gold-backed instruments for liquidity.

Allocated vs unallocated custody

Allocated storage: specific bars, identified by serial number and assay certificate, are registered in the owner’s name. The custodian holds them on behalf of the owner and cannot use them for any other purpose. Storage fees apply (typically 0.1–0.15% per annum of value). This is the only structure that provides true legal ownership of specific physical gold.

Unallocated accounts (held at bullion banks): the bank owes the owner a certain weight of gold, but does not segregate specific bars. The owner is an unsecured creditor of the bank for that gold weight. This is appropriate for trading purposes; it is not appropriate as a long-term wealth preservation store.

The below-spot opportunity

For family offices building physical gold positions, below-spot purchase opportunities represent a meaningful alpha enhancement. A 4.9% discount to spot on a USD 1 million purchase is USD 49,000 captured on day one — before any gold price appreciation. Over the life of a long-term holding, this is a material improvement in cost basis.

The parameters that define a legitimate below-spot opportunity: full documentation (assay, chain of custody, export licence), credible seller with verifiable KYC, standard settlement mechanism (bank escrow or LC), and a discount quantum that is large enough to reflect genuine seller motivation but not so large as to defy economic logic. The current OnePiece offering — USD 5,000/kg below spot on a 10kg lot — falls squarely within legitimate parameters.