Gold Investing Handbook for Asset Managers (English)

Throughout history, gold has played a vital role as a financial asset in the global financial system. It has been prevalent as a currency in many civilizations, including Ancient Greece, Rome, and Egypt. In the modern era, gold continues to play a critical role in the global financial system, serving as a hedge against inflation, a safe haven asset, and a reserve asset for central banks. In recent years, gold has regained its importance as a financial asset, with many investors using it as a hedge against inflation and market volatility. In addition, central banks and other financial institutions continue to hold significant amounts of gold as part of their reserve assets. The increasing awareness of environmental, social, and governance (ESG) issues in the investment community has led to a growing interest in responsible sourcing and use of gold. Initiatives such as the LBMA's Responsible Sourcing Program (RSP) and the World Gold Council's Responsible Gold Mining Principles (RGMP) aim to promote sustainable and ethical practices in the gold mining industry. This report first discusses the credentials of gold as a strategic asset by analyzing its historical risk and return characteristics, its correlation with various asset classes, and the historical and future performance of several stylized institutional portfolios with varying allocations to gold. The later part of the report addresses practical aspects for reserve managers of investing into gold and discusses various gold buying practices; gold trading, storing, and accounting; and gold liquidity management strategies. ESG considerations for gold investments are covered in the final chapter.