<strong>Ultra Wealthy Are Piling Into a Centuries-Old Gold Trade in Asia </strong>

Asian ultra-wealthy families and family offices are increasingly engaging directly in the physical gold trade, moving beyond traditional index trackers and vault holdings. Driven by the current bullion boom, these investors are financing, shipping, and actively trading gold themselves, exemplified by firms like Cavendish Investment Corp. allocating significant portfolio portions to this centuries-old practice, indicating a strategic shift towards more direct and active participation in the precious metals market.

Analysis

A significant strategic shift is underway among Asia's ultra-wealthy families, who are moving beyond passive gold investments such as index trackers and simple vault holdings to engage directly in the physical bullion trade. These family offices are now actively financing, shipping, and trading gold, effectively disintermediating traditional players to capture more value amidst the current bullion boom. This trend is quantified by the actions of firms like Cavendish Investment Corp., which has allocated approximately one-third of its portfolio to this hands-on strategy. The involvement of precious metals dealers like J. Rotbart & Co. and Goldstrom indicates the development of a supporting ecosystem for this direct-trade model. This behavior signals a sophisticated, high-conviction view on gold, prioritizing physical control and supply chain participation over the liquidity and simplicity of exchange-traded products.

Key Decisions for Investors

• The move by sophisticated family offices into direct physical gold trading, bypassing ETFs, serves as a strong bullish indicator for the underlying commodity and suggests investors should consider the growing divergence between physical and paper gold strategies.
• Institutional investors should evaluate potential opportunities in the precious metals supply chain, such as financing and logistics, as demand for these services from high-net-worth clients is clearly increasing.
• While this trend has neutral immediate implications for gold ETFs like GLD or PHYS, it reinforces the positive sentiment for gold and highlights a preference among 'smart money' for tangible assets over financial instruments in the current market.