Darcy Ungaro: Why the gold debate is heating up as currencies lose ground

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  Published in Stocks and Investing on Saturday, November 1st 2025 at 19:49 GMT by The New Zealand Herald

Gold or Cash? What Rising Prices Mean for Your Kiwisaver Strategy

Rising gold prices have become a talking point for New Zealand investors looking to secure their futures. In a recent article for the New Zealand Herald, finance journalist Darcy Ungaro delves into how the uptick in the precious‑metal market could reshape the way KiwiSaver members think about their portfolios. The piece offers a practical look at the options available, the risks involved, and the regulatory landscape that governs these decisions.

The Gold Surge and Its Drivers

Gold has been climbing steadily, outpacing most other commodities and even the broader equity markets. The article attributes the surge to a combination of inflationary pressures, geopolitical uncertainty, and a weakening New Zealand dollar. When the Reserve Bank of New Zealand keeps interest rates low, gold’s appeal as an inflation‑hedge strengthens. As the article notes, “gold is traditionally seen as a safe‑haven asset, and its price has risen in tandem with worries about the cost of living and global stability.”

Gold’s performance has not just been a headline; it has real implications for KiwiSaver, which traditionally has focused on equities, bonds, and cash. The article links to the Reserve Bank’s inflation forecasts and the latest gold price data from the London Bullion Market Association, providing readers with real‑time context for the discussion.

KiwiSaver’s Current Asset Allocation

KiwiSaver funds are required to maintain a minimum level of diversification. Typically, they hold a mix of equity, fixed‑income, and cash or money‑market instruments. The article explains that, as of the most recent annual report, only a handful of KiwiSaver providers offer exposure to physical gold or gold‑based ETFs. This limited availability means that most members are still relying on the traditional trio of assets.

“Gold is not a mandatory component,” Ungaro writes. “But with its rising price, it’s becoming an attractive alternative for investors seeking to protect against inflation and currency fluctuations.” The piece highlights that investors must assess whether their personal risk tolerance aligns with the volatility that gold can introduce.

How to Add Gold to Your KiwiSaver Portfolio

The article outlines several avenues through which KiwiSaver members can gain exposure to gold:

1. Gold‑Based ETFs – The most common route is to invest in exchange‑traded funds that track the price of gold or the performance of gold‑mining companies. The article cites a few popular funds, such as the iShares Physical Gold ETC and the SPDR Gold Shares ETF, both of which are listed on the New Zealand Exchange. These funds offer liquid access to gold without the logistical challenges of storing the metal physically.

2. Physical Gold Shares – Some KiwiSaver providers have begun offering “gold shares,” which are essentially certificates representing ownership of a set amount of gold bullion. The article explains that these shares are backed by actual gold stored in secure vaults overseas. The link to the Gold Council’s certification page reassures readers that these products meet stringent security standards.

3. Gold‑Mining Stocks – An alternative, though more indirect, method is to invest in shares of gold‑mining companies. While these stocks can be more volatile than the metal itself, they often benefit from a “gold‑stock correlation” that investors seek.

Ungaro emphasizes that each option comes with its own fee structure. “ETF expense ratios,” she notes, “can be lower than the management fees associated with physical gold shares.” She urges members to factor these costs into their long‑term return calculations.

The Risks of Gold in a Retirement Portfolio

Gold is often hailed as a safe haven, but it is not without risks. The article details several concerns:

• Volatility – Gold can experience sharp price swings, especially during periods of economic uncertainty. This volatility may be at odds with the long‑term, risk‑averse nature of KiwiSaver investments.

• Lack of Yield – Unlike bonds, gold does not produce dividends or interest. Over a retirement horizon, this means investors forego potential income streams.

• Regulatory Limits – The New Zealand Superannuation Fund Act imposes constraints on the types of assets that can be held in KiwiSaver. While gold ETFs are permissible, direct investment in physical gold may still be restricted depending on the provider.

The article links to the KiwiSaver Regulations document, providing a legal framework for readers who wish to understand the boundaries of permissible investments.

Practical Advice for KiwiSaver Members

The author offers a pragmatic framework for evaluating whether gold is a fit for your KiwiSaver:

1. Assess Your Inflation Exposure – If you’re worried that the real value of your KiwiSaver will erode due to rising prices, gold could offer a hedge.

2. Evaluate Your Risk Tolerance – Consider how much volatility you can stomach. If you’re in the early stages of retirement, a heavier gold allocation may be too risky.

3. Compare Costs – Factor in the expense ratios of gold ETFs versus the storage and management fees of physical gold shares.

4. Diversify Within Gold – If you decide to add gold, consider a mix of ETFs and mining stocks to spread risk.

5. Consult Your KiwiSaver Provider – Not all providers offer the same gold products. Reach out to confirm what’s available and any associated fees.

The article ends with a call to action: “If you’re unsure whether gold should be part of your KiwiSaver strategy, talk to a registered financial adviser. They can help you weigh the benefits and drawbacks in the context of your overall financial plan.”

Bottom Line

Gold’s recent price rally has pushed the asset into the spotlight for KiwiSaver members looking for ways to safeguard against inflation and currency depreciation. While the article acknowledges that gold can be a useful tool in a diversified retirement portfolio, it also underscores the importance of understanding the associated costs, volatility, and regulatory constraints. By staying informed and consulting with professional advisers, New Zealand investors can decide whether gold is a strategic fit for their KiwiSaver plans.