Anyone hawking gold would have you believe it’s the favorite investment of the ultra-rich. That goes for everyone selling gold services, gold investing advice, or anything else related to the shiny yellow metal.
But do the uber-wealthy actually invest much money in gold? And among those who do hold some gold, what do they like about it?
Real estate consultancy Knight Frank surveys wealthy individuals every year, to understand where they’re investing in the current market. It turns out the average ultra-high net worth individual (UHNWI) with a net worth over $30 million does own a little gold. They just don’t own giant vaults and swim in gold like Scrooge McDuck.
The average UHNWI holds about 2% of their net worth in gold. While that’s more than they keep in cryptocurrencies (1%), it’s less than they keep in any other asset classes.
In fact, wealthy investors even put more money into “investments of passion” such as fine art, wine, and cars than they do in gold. These investments of passion make up 3% of the average wealthy investors’ portfolio.
Gold serves as a defensive hedge against unexpected crises rather than a wealth-building strategy. It offers protection against risks like inflation, a weak U.S. dollar, and geopolitical uncertainty. So, while the ultra-wealthy invest in gold, it’s more about safeguarding their wealth than making a fortune.
