Companies that managing money for the wealthy -- called family offices -- focus more on preserving wealth than chasing large investment gains. When the credit crisis hit, they shifted into safe assets, including treasuries and cash as well as gold.It's an open question as to whether the families being catered to by family offices, not to mention the offices themselves, are smart money or dumb money.
Speaking at the GAIM hedge funds conference, managers of family offices said they have been building positions in gold via gold-focused hedge funds and mutual funds as well as gold exchange traded funds (ETFs), with some even stocking up on the precious metal.
"Physical gold had not been on anyone's asset allocation for 20 years. That's definitely made a big comeback," said Egon Vorfeld, managing partner at the Forum Finance Group, a Geneva-based wealth manager for a global clientele of wealthy families.
There was a brow-raiser at the end of the report: one of the attendees at the conference said that cabdrivers were beginning to talk about buying gold.