Gold had a remarkable run, delivering close to 39% in rand terms last year and setting records in dollar terms. It is one of the standout performers across any asset class.
Most South Africans instinctively understand gold’s appeal. We dig it out of the ground so it’s part of our economic identity. But the way most investors actually hold gold has barely changed in a generation. Do the traditional approaches still make sense?
For most investors, the options are familiar. Physical coins or bars are costly to buy, expensive to insure and complicated to sell. Gold ETFs are more practical, but you are buying a claim, not the metal. Mining shares offer gold exposure but come with operational risk entirely unrelated to the gold price. None of these are bad choices, but they were all designed for a pre-digital world.
Luno has just listed Tether Gold (XAUt), which has prompted me to think about what we actually mean when we say we want to own gold.
Each XAUt token represents one fine troy ounce of physical gold stored in a Swiss vault that meets the London Bullion Market Association’s Good Delivery standard, the same benchmark used by central banks and institutional investors worldwide. The gold is allocated, not pooled. Each bar carries a unique serial number tied to the tokens it backs, and you can verify your specific allocation at any time through a lookup tool on Tether’s website.
Regular independent audits confirm the reserves. As of this month, the total is over 22Mt, a $3.3bn pool, making it the largest tokenised gold asset in the world by market capitalisation.
XAUt trades continuously, 24 hours a day, seven days a week
What makes this structurally interesting for the serious investor is not the gold itself. It is the format.
XAUt trades 24 hours a day, seven days a week. It is divisible down to 0.000001 of a troy ounce, so entry does not require buying a full ounce. There are no storage premiums or custody fees eating into your return. Settlement is instant. You do not need a broker in Zurich or a safe in Sandton.
The argument here is not crypto vs traditional assets. It is about the friction costs embedded in traditional ownership that investors have quietly accepted for decades. When you buy a gold coin, you pay a premium over the spot price. When you store it, you pay ongoing fees. When you sell, you pay again, and you wait. These inefficiencies do not show up neatly in a performance chart, but they compound against you just as surely as fees do in any other investment vehicle.
For the FM reader, the case for gold exposure at this macro moment largely makes itself. Inflation remains elevated in key economies, geopolitical uncertainty has not abated, and overall gold demand hit record levels in 2025, topping 5,000t for the first time. For most, the question is not whether to hold gold but rather how to hold it efficiently.
Physical delivery made sense, but better infrastructure is now in place. A verified, auditable, 24/7-tradeable digital claim on a Swiss vault is simply a more efficient version of the same asset. The metal has not changed, nor the reasons to add it to your portfolio, but the wrapper around it has.
Christo de Wit is country manager for Luno South Africa
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.