Gold in Modern Portfolios
From the MGD Private Pulse series
Insights for UHNW individuals and family enterprises.
Gold’s move into record-high territory has placed the asset class firmly back on investors’ radar. But whether prices are setting new highs, consolidating, or retracing, the more enduring question is not where gold trades today, but what role gold may play within a diversified portfolio.
For family offices and long-term portfolios, that question is particularly important. Gold is not usually considered for performance alone. Its relevance often lies in how it behaves when the environment becomes less predictable.
This edition of MGD Private Pulse features insights from Stephen Furness, Chief Investment Officer at MGD Private. With more than three decades advising Australia’s leading business families, Stephen works closely with Investment Committees and family groups where portfolio decisions must do more than seek returns. They need to preserve resilience, support liquidity, and remain aligned with the broader purpose of family capital.
The perspectives shared here are informed by recent research from Quilla Investment Management, which highlights the structural forces now supporting gold, including central bank demand, fiscal pressure, real yield sensitivity and ongoing geopolitical uncertainty. For family offices and UHNW investors, these forces matter less as a market narrative than as a question of portfolio role.
Gold at a Glance
Gold rose approximately 64% in 2025, its strongest annual performance since 1979.
Gold’s share of global central bank reserves rose from 9% in 2022 to 18.2% as at December 2025.
Investor participation broadened meaningfully, with gold-backed ETF flows remaining positive from mid-2024 onwards.
Gold continued to be valued less for income or growth, and more for its role as a diversifier within multi-asset portfolios.
Source: Quilla Investment Management, March 2026.
Gold’s return to relevance
Gold has been one of the strongest-performing assets in recent years. That has brought attention back to the asset, but it is not the most important part of the story.
What matters more is why gold is being reassessed. The forces supporting it are no longer confined to short-term sentiment. Central bank accumulation has remained durable. Fiscal settings across major economies are becoming harder to dismiss. Real yields continue to shape opportunity cost. Geopolitical fragmentation has not receded.
Taken together, these forces make gold more than a reaction trade. They put it back into the conversation as a strategic portfolio holding.
Why this matters to family portfolios
For family offices and complex private balance sheets, gold is rarely a headline allocation. Nor is it usually held in the hope that it will drive performance on its own.
Its role is quieter than that. Gold may help when confidence in policy weakens, when inflation proves less settled than expected, or when traditional portfolio relationships become less dependable. In portfolios already shaped by operating businesses, property, private assets and intergenerational liquidity demands, that kind of behaviour can matter more than a recent return number.
That is why the discussion is worth reframing. The question is not whether gold has had a strong run. It is whether portfolios are clear on what they would want gold to do.
A structural support, not a passing one
One of the more important features of the current backdrop is the persistence of central bank demand. This is not speculative buying—it reflects a gradual rethinking of reserve composition and a desire, in some parts of the world, to diversify away from a single-currency system.
Investor demand has also changed. Gold is more sensitive than it once was to moves in real yields, policy expectations and fiscal credibility. That can create sharp moves in either direction over short periods. But those moves should not be confused with the longer-term case.
For disciplined portfolios, the distinction is important. Positioning can change quickly. Structural drivers usually do not
Gold’s place in a modern portfolio
Gold does not generate income, and it is not ordinarily relied upon to compound like a strong operating business or a quality equity portfolio. Its value lies elsewhere.
It may provide stability when confidence in other parts of the system weakens. It may broaden the range of outcomes in a portfolio heavily exposed to financial assets. It may simply reduce the need to rely on a narrower set of assumptions about inflation, policy and market behaviour.
For that reason, gold is usually best judged as part of a whole portfolio rather than as a standalone idea. In family office settings, that is especially important. Allocations rarely sit in isolation. They interact with private investments, business interests, trust structures, liquidity reserves and generational objectives.
Supportive, but less straightforward
The case for gold remains intact, but the path ahead may be less one-way than recent performance suggests.
Central bank demand remains supportive. Fiscal strain has not disappeared. Geopolitical risk remains present. At the same time, gold is increasingly exposed to changes in rate expectations and investor positioning, which can make the journey less smooth. That should not weaken conviction in its role—it should simply reinforce the need for discipline.
For family offices and Investment Committees, the practical issue is not whether to become dogmatic about gold. It is whether current exposure still makes sense.
Where allocations have grown after a strong run, rebalancing may be appropriate. Where there is no exposure, it may be worth asking whether that remains the right position in a portfolio already reliant on other assets behaving well at the same time.
The better question is not whether gold is up or down. It is what the portfolio is asking it to do.
Do you know how your portfolio is positioned for the environment ahead?
For some investors, that position is clear; for others, it has evolved gradually over time. Understanding how each asset behaves—particularly in periods of uncertainty—can provide greater clarity when decisions matter most. If a more considered view would support your planning, the MGD Private team can help you assess the path forward. Learn more about our MGD Private team.
MGD Private Pulse is a series from MGD Private exploring the issues that matter most to ultra-high-net-worth individuals and family enterprises. MGD Private represents the specialist private-client capability within MGD Group, guiding Australia’s leading business families who continue to own and shape significant enterprises with discretion, precision and enduring care.
Reference:
This article draws on research and analysis from Quilla Investment Management, March 2026. For a copy of the full white paper or to discuss how these insights may apply to you, please get in touch.
Important Note:
Financial advice is provided by MGD Wealth Ltd. AFSL 222600, ABN 53 009 079 725. Stephen Furness is a Representative of MGD Wealth Ltd. Please note that past performance is not an indication of future performance. Any advice included in this article is general and has been prepared without taking into account your objectives, financial situation or needs. As such, you should consider its appropriateness having regard to these factors before acting on it. Before you make any decision about whether to acquire a certain financial product, you should obtain and read the relevant product disclosure statement.
Tax advice is provided by MGD Tax, ABN 22 355 316 063.
Liability limited by a Scheme approved under Professional Standards Legislation.
