Gold in a changing global economic environment

Gold has a distinctive role in global markets because it is both a traded commodity and an asset held by investors and central banks. Its price can respond to real interest rates, currency movements, inflation expectations, geopolitical uncertainty, investor positioning and central-bank activity. Unlike a company share or an interest-bearing bond, physical gold does not itself generate earnings or contractual interest. Its investment case therefore depends on the price at which it is acquired, the role it plays within a portfolio and the costs associated with owning, storing and eventually selling it.

Recent market data illustrates the scale of global interest in the metal. According to the World Gold Council's Gold Demand Trends: Full Year 2025, total gold demand, including over-the-counter activity, exceeded 5,000 tonnes in 2025, with an estimated value of US$555 billion. Global gold investment demand reached approximately 2,175 tonnes, while central banks purchased around 863 tonnes on a net basis. The report attributed investment activity in part to safe-haven and diversification motives, alongside price-related demand. These figures establish the importance of gold in global markets; they do not mean gold prices will continue to rise or that the metal will protect every investor's portfolio. Source: World Gold Council — Gold Demand Trends, Full Year 2025.

Gold is often considered during periods of economic or geopolitical uncertainty because it is not the direct liability of a corporate issuer or government. Nevertheless, its price can fall significantly, including during periods of market stress when investors sell assets to raise cash. Its performance can also be affected by changes in interest rates and the relative attractiveness of interest-bearing investments. Physical ownership introduces additional practical considerations that do not arise in the same way with listed securities, including storage, insurance, authenticity verification, transport and the difference between buying and selling prices.

How the opportunity process works

The process begins by clarifying the form of exposure being considered. Physical bullion may take the form of bars or eligible coins, but products differ in purity, weight, manufacturer, recognised-market status and resale arrangements. Investors should establish whether the proposed transaction involves direct ownership of identified metal, allocated holdings, pooled holdings or another contractual arrangement. These are not interchangeable. The legal rights of an investor, including what happens if a custodian or intermediary becomes insolvent, depend on the actual documentation and custody structure.

The next stage is verification of the provider, product and total cost. Investors should examine the source and authenticity of the metal, the documentation supporting its specification, the location and conditions of storage, insurance arrangements, custody fees and any charges for delivery or withdrawal. If metal is held by a third party, the investor should understand how holdings are recorded, independently reconciled and made available for inspection or transfer. The purchase price should be compared with an appropriate market reference, accounting for premiums, spreads and applicable taxes or charges.

Before proceeding, the investor should understand how the position could be sold or transferred. Relevant matters include the provider's buy-back arrangements, available resale channels, settlement procedures and any costs associated with moving or liquidating the metal. After completing appropriate due diligence, the investor follows the provider's documented purchase and payment process and retains the contractual and ownership records. If ASP facilitates an introduction, the investor should confirm all transaction and custody arrangements directly with the relevant provider before committing capital.

Principal considerations

Gold does not produce an income stream, and returns depend primarily on price changes after costs. Prices can be volatile, while storage, insurance and dealing spreads can reduce the value realised on sale. Physical metal also carries risks relating to fraud, theft, custody and documentation. Investors should verify the ownership structure and all fees rather than assume that every product described as gold-backed provides direct ownership of bullion.