Gold has surged to fresh record highs, climbing above $5,000 an ounce, or around £3,700, as investors look for safety in an increasingly uncertain world.
Rising global trade tensions and renewed geopolitical risks have pushed the price of the precious metal to levels that would have seemed unlikely just a year ago.
The rally has also caught the attention of pension savers as research by Standard Life suggests there has been growing interest in whether gold could play a role in retirement pots.
Gold has long been viewed as a safe haven during periods of instability, but holding it inside a pension is more complicated than many savers realise.
Extra costs, restrictions and risks can all reduce its appeal, particularly when prices are already high.
Why are gold prices rising?
Central bank demand has been a major driver in rising costs. According to the World Gold Council, more than 1,000 tonnes of gold were added to official reserves in 2024, the third year in a row of unusually large purchases.
At the same time, investors have shifted money into so-called safe haven assets amid concerns over tariffs, conflict and the long-term outlook for global growth.
Russ Mould, investment director at AJ Bell, said: “In less than 18 months bullion has more than doubled in value – buoyed by central bank demand, global turmoil, dollar weakness, and the diminished appeal of other popular defensive assets.”
Gold’s reputation rests on its tendency to hold up during periods of stress.
It has historically protected purchasing power during bouts of inflation and currency weakness, and it often moves differently to shares and bonds, which can help spread risk in a diversified portfolio.
Is it a good idea to hold gold in a pension?
Mike Ambery, retirement savings director at Standard Life, said the recent price surge had prompted many savers to take a fresh look at their pensions.
He said: “When you see prices breaking fresh all-time highs, it’s natural for savers to wonder whether they should be doing something differently with their pension.”
But he warned that gold’s reputation for safety can be misleading. Unlike shares or bonds, it produces no income.
Any return depends entirely on the price rising, and that can leave investors disappointed when markets are strong or interest rates are high.
Ambery explained: “Gold can play a role for some people, particularly when markets feel uncertain, but it’s important to understand both the potential benefits and limitations before making any decisions.
“Unlike some other precious metals, gold isn’t widely used in industry, so its value is largely based on its long history as a store of value.”
For most pension savers, that means gold is unlikely to be a core holding.
How gold can be held in a pension
Adding gold to a pension is not as simple as buying shares or a fund. There are two main ways to do it, both with limitations.
Physical gold can usually only be held through a self-invested personal pension (SIPP), and only if it meets strict HMRC rules.
The gold must meet minimum purity standards, be held in approved forms such as bars, and be stored in authorised vaults. Storage and insurance fees apply, which can eat into returns.
A more common option is gold exchange traded commodities (ETCs), which track the price of gold and can be bought through many mainstream pension platforms.
These avoid the practical issues of owning physical gold, but they are not available in every scheme and still come with ongoing charges.
Ambery said it was important for savers to understand the trade-offs, adding: “Both give exposure to gold, but the fees, risks and practicalities vary.
“It’s important savers understand those differences before deciding which route, if any, is right for them.”
Many pension providers also require savers to take financial advice before adding physical gold or other specialist investments to a pension, particularly within a SIPP, adding to overall costs.
Charges matter more in pensions because investments are usually held for decades.
Vaulting fees for physical gold can run into hundreds of pounds a year, while gold ETCs carry ongoing charges that can reduce returns if prices stagnate or fall.
Gold’s lack of income can also be a drawback for those approaching retirement, when portfolios are often shifted towards assets that generate more reliable cashflows.
While gold has performed strongly in recent years, its long-term real returns have historically lagged behind equities.
Geopolitical issues driving demand
The latest rally in gold has been closely linked to ongoing geopolitical events, Lucy Smith, investment manager at Killik and Co, said.
She said markets felt calmer than during last year’s spikes in volatility, but tensions had only eased slightly.
Investor relief followed signs that the US administration was stepping back from military escalation in Greenland, which weighed on defence stocks.
Smith said: “This money didn’t all flow back into equities, however, hence the gold price rise.”
Tariffs are a key risk, she highlighted, noting that the threat of sudden trade measures has increased demand for safe haven assets.
She continued: “As saw last April, Trump’s gung-ho approach to tariffs means they can come at any time, which is why safe haven assets are performing so well.”
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Looking ahead, Smith expects investors to continue diversifying away from US assets, with European markets and non-equity investments among the probable destinations.
While she does not expect the US to lose its dominant position in global markets, she believes geopolitics will remain central to investment decisions.
She said: “If middle powers push back, expect more volatility and an even higher gold price.”
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