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A quarter of UK investors view gold as the best investment opportunity over the next 12 months, despite a lacklustre preceding 12 months, according to the 2018 Legg Mason Global Investment Survey.

The survey, which polled the views of over 16,000 investors globally, revealed a quarter of UK investors identified gold as a better investment opportunity than equities, bonds, cash and alternatives over the next year.

Gold has become more popular than last year among UK investors, with the total number favouring it up from 22%.

Indeed, a wider safe haven trade can be seen in the UK this year, with a further 19% highlighting cash as their favourite asset class for the coming 12 months, up from 14% the year before. This may have something to do with the clouds of uncertainty Brexit is creating across a range of asset classes.

Is gold the safe haven trade for 2019?

Evidence of the safe haven trade comes amid a shift in expectations for markets, with an emerging trade war between the US and China, rising US interest rates and Brexit all combining to increase the headwinds facing equity markets.

Nonetheless, while investors look for areas of safety, Legg Mason thinks they should perhaps consider the path gold has taken recently. Amid a strengthening dollar which has acted as a headwind, as well as the commitments to support global economies, the gold price has fallen sharply.

Investors who were investing in gold at the start of the year have seen its price fall from $1,302 to $1,233, a loss of 5%.

Commenting on the findings, Alex Barry, Head of UK Distribution at Legg Mason, said: “It is perhaps understandable that, after such a prolonged bull market for equities, investors have once again looked to safe havens such as gold and cash. We understand the need for investors to protect themselves. However, they must consider the return profile of such assets. Taking gold as a case in point, the asset has failed to deliver for investors this calendar year, and remains hard to see a catalyst for it currently.”

Gold was also an attractive asset for European investors who shared a similar view to those in the UK. Investors in Switzerland (29%), Germany (27%) and Italy (26%) all highlighted gold as an attractive investment opportunity, although for Swiss and Germans investing in gold was on a par with domestic stocks (30% and 27%, respectively). By contrast, less than a fifth of US investors (18%) favoured gold.

The Legg Mason Global Investment Survey, now in its sixth year, surveyed 16,810 investors across the globe in total, with respondents investing at least €10,000 in the next twelve months.

Further afield, investing in gold remains popular, with 34% of investors in China viewing it as the best investment opportunity over the next 12 months.

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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