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With the price of gold at record highs and demand surging in Asia, many ultra-wealthy families are embracing a 19th-century model and jumping into the gold business, taking on the role of bullion traders, financing, shipping, and flipping gold without the middlemen.

The Business Times highlighted Cavendish Investment as an example of this trend. It is a multi-family office run by the former chair of a Hong Kong jewelry company. This year, the company allocated about one-third of its portfolio to physical gold trade. As the Times put it, Cavendish has gone “a step beyond index trackers and vault holdings.”

The company sources gold from small mines in Kenya and other African countries. It then flies the ore to Hong Kong, where they refine it and sell it at market prices to wealthy clients throughout Asia.

“If this sounds like a 19th-century trading house, that’s about right,” the Times observed.

This is not a business for the meek. Trading unrefined gold comes with a high level of risk. Players need to have a deep understanding of the market and have strong connections with other actors in the market. 

“When you absolutely know what you are doing, it’s mechanical and very lucrative,” Gold broker Patrick Tuohy said.

“But there is an enormous gap between not knowing exactly what you are doing and having a working process that’s tried and tested. And that lack of experience can cost you thousands, if not millions, of U.S. dollars.”

However, with a strong network in place, there is significant profit potential. Cavendish reports 5 to 10 percent premiums on each round-trip shipment. 

Asian investors have historically turned to gold as a hedge against riskier trades, but with elevated levels of geopolitical tension, inflation worries, and monetary malfeasance have pushed demand for gold has been pushed even higher.

Asian investors, along with central bank gold buying, have been the primary drivers during the early stages of this gold bull market.

Bar and coin demand was up by 11 percent globally through the first half of 2025, rising to 582 tonnes, with Chinese and Indian investors leading the way. 

Chinese bar and coin demand grew by 44 percent year-on-year in H1. Chinese investors snapped up 115 tonnes of gold bars and coins in the second quarter alone. It was the strongest H1 for physical gold buying since 2013.

According to the Times, wealthy Asian investors have shown “a strong appetite” for the yellow metal. Hong Kong-based investors have more than doubled their allocations to gold this year. There was also a dramatic increase in mainland China, with gold making up an average of 15 percent of wealthy investor portfolios. That was up from 7 percent just one year ago.

India bar and coin demand grew by 7 percent through the first half of the year.

Meanwhile, Americans continued to sell their gold. Year-on-year bar and coin sales plummeted by 53 percent in H1. Demand in the second quarter was only 9 tonnes, the lowest quarterly level since Q4 2019.

Precious metals broker Joshua Rotbart said, “Asian families understand gold more intimately than Western families because it’s been part of the culture for so long. They know they need to make this investment as a business.”

Asian investors seem to intuitively understand that gold is sound money. Gold broker Tuohy told the Times, “Anywhere you go in Asia, everyone buys gold in much larger proportions than they do in the West.”

“People hold gold because they know they can always liquidate it on a rainy day.”

Some wealthy families are doing just that. They're using their gold holdings as liquidity to purchase other assets, including real estate and equities.

There is also a growing number of wealthy Asian families leasing their gold. According to the Times, billionaire families in the UAE and Hong Kong are earning 3 to 4 percent by loaning their physical bullion to jewelers. This allows gold investors to earn yield on top of the rapid price appreciation of the metal.

“They are turning a safe-haven asset into a quietly compounding cash machine.”

Additionally, some savvy Asian investors are buying discounted bars in Dubai and then flipping them in Hong Kong, where demand is red hot, and people are paying a premium to get their hands on physical metal.

Dollar weakness is giving Asian gold investors a boost. As the Times described it, “The U.S. dollar has been wobbling under the weight of a ballooning U.S. debt deficit and potential interest rate cuts from the Federal Reserve.”

This boosts gold’s safe-haven appeal and makes the metal priced in dollars for Asian buyers.

Hong Kong has currency issues of its own. A gold mining executive told the Times that the hedge against the Hong Kong dollar is getting physical metal.

Looking ahead, analysts think the red-hot market could cool somewhat as higher prices weigh on demand. However, another increase in geopolitical uncertainty surrounding the U.S. midterm elections could boost demand again. 

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