The gold standard in spreading your risk is glistening

Some hate gold and see it as a useless "chunk of metal" with no value at all. Others see it as a finite and rare currency, and the best form of money throughout history and indeed today.

As is often the case in such debate, the truth is somewhere in between.

Gold, like stocks, euros or any form of wealth, is neither good nor bad, per se. However, there is a growing body of academic and other independent research that shows that gold has value as a hedging instrument and a safe-haven asset.

"Gold can serve as a hedge against declining values of key fiat currencies."

These are not the words of some so-called 'gold bug', warning that paper currencies are set to collapse in value. Rather, they are part of the recent findings of the UK's influential and respected Chatham House, or the Royal Institute of International Affairs.

"Holding gold - the world's only independent currency - gives you some protection against the incompetence and idiocy of Europe's bickering politicians. So keep it."

The second quotation is from Merryn Somerset-Webb, one of the leading finance columnists at the Financial Times and one of the most respected financial experts in the UK.

Chatham House and Ms Somerset- Webb are part of a growing consensus about the importance of having an allocation to gold as part of diversified investment and pension portfolios.

The key to successful long-term investing is diversification and owning a range of different assets.

Diversification helps smooth returns over the long term since it reduces the overall volatility of a portfolio and returns. In other words, it reduces investment risk and exposure to single assets like Irish property.

This risk reduction is possible because not all assets move in the same direction at the same time. This is known as the correlation of asset returns. Adding an asset such as gold to a portfolio that has a low or negative correlation with other assets aids in risk reduction and enhances returns in the long term.

Gold has been shown to enhance returns and to reduce overall volatility over the long term. This was clearly seen in Ireland and internationally during the financial crisis. Gold was one of the very few assets to have risen in value in all currencies, including in euros.

The importance of owning gold has been shown in numerous academic papers. It has been shown in independent research by the asset allocation specialists, Mercer Consulting and Ibbotson Associates. It has also been shown by consulting group, New Frontier Advisors, and by leading international think-tank, Chatham House.

The historical record also shows how gold has protected people from stock and property crashes. Throughout history, gold has protected people from inflation and currency debasement and has served as a vital wealth preservation tool.

We are living in volatile financial times and investors will face challenges in the coming years. Debt crises tend to lead to currency devaluations and a decline in living standards.

Wealthy individuals, pension funds, companies, endowments, charities, foundations, family offices, hedge funds and central banks are diversifying into gold today.

It is not just the wealthy that are buying gold. Rather, there is broad-based global demand. In particular, interest from China, India and the rest of Asia has grown very significantly.

The growing middle classes and very wealthy in Asia trust in gold as a better store of value than their local paper currencies.

In China, Chairman Mao banned gold ownership in 1950 - and the ban continued until 2003 when the Chinese gold market was liberalised. The per capita gold buying and ownership of 1.3 billion Chinese people is increasing from near zero levels.

Only this week, a report by ANZ Bank said that gold prices would double to over $2,400/oz in the coming years due to a doubling in Asian demand and global investment. "Greater demand from investors and central banks will see gold prices rise materially over the long term."

"Most of the time, you don't want to pay for it. But if you need it, you're glad you have it," ANZ said of physical gold.

The euro has fallen 23pc against gold since January 2014, with gold rising from €880 per ounce in January 2014 to €1,090 per ounce today. Gold rose 12pc against the euro in 2014 and so far in 2015, gold has risen a further 11pc versus the euro.

Chatham House concluded in their recent report that gold may "continue playing a significant role in the international monetary system, serving as a valuable hedge and safe haven, particularly in times when tail risks predominate".

A 10pc allocation to gold is prudent in these uncertain times and a way to hedge falls in stock, bond and property markets. It is also a way to hedge the possibility of bail-ins or deposit confiscation and, of course, currency devaluations.

Mark O'Byrne is head of research and executive director at gold broker GoldCore