A lot of people in Australia use Self-Managed Superannuation Funds (SMSF) to diversify their investments into other asset classes like gold and other assets that may not be available in most retail superfund offerings.  In 2020 the number of Australians who are members of SMSFs grew to over 1.1 Million. The value of assets under SMSF management has to $AUD 705 Billion.

SMSFs have grown in popularity over the last couple of months as Covid-19 continues to spread. This is because investors are looking for alternative investment vehicles that are not tied with equity markets. Gold provides a perfect hedge to other holdings that may be part of superannuation portfolios.

Gold and other precious metals are considered as balanced options especially because of their low correlation with equity markets. And with the uncertainty that Covid-19 has brought as well as the consequences that are set to follow, having a balanced investment superannuation portfolio could make the world of difference.

During times of economic turmoil, stocks may plummet but gold usually outperforms other investment classes. When people panic about the future, especially about their ability to generate an income, gold is the go-to safe haven that most people turn to.  The rapid inflow of cash during uncertain times can cause other asset classes to suffer in the long run. For instance, there was a dramatic fall in equities during the first quarter of the year. The Australian Share market traded at 3.6% while gold delivered more than 18% returns during the same period.  If you have a superannuation, you should be looking for precious metals you can invest in. This might sound complicated to do for someone who doesn’t have the faintest clue of what SMSF gold bullion should look like.

What keeps gold moving forward?

• The threat of Covid -19 and the slow race towards a vaccine will continue to affect the gold market in the near future but no one knows what the future will look like.

• Historical seasonal trends that still hold true.

• The managed positioning of money in futures markets continues to drive the gold price.

• The COVID-19 pandemic has made the path to a global recovery hard. It will continue to impact the economy for years to come. Countries might be deploying various stimulus packages, but what they are essentially doing is flooding the market with currency and thereby devaluing the fiat system. Covid-19 and the response of governments is making a stronger case for gold standard enthusiasts who have been telling people for years about how unreliable fiat currency models are.

The gold price rallied by over 10% along with an increase in risky assets in the second quarter of 2020. This demonstrated that the appetite for gold bullion is not just limited to investors seeking a hedge asset to invest in. Fears over inflation, measures to increase the value of the U.S dollar, stimulus packages, the race toward a Covid-19 will continue to drive gold prices up which is ideal for SMSF gold bullion.

If you have an Self-managed superannuation fund and you would like to invest in gold, this is the best time to do so.