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U.K. Market Analysts See Value In Gold As A Safe Haven

Kitco News

(Kitco News) - While gold isn’t finding much love from investors, analysts see growing potential for the precious metal as demand for safe-haven assets is expected to rise.

In the latest results of its Valuations Index, The British CFA Society found that 80% of Chartered Financial Analysts (CFA) in the country saw gold as fair value or undervalued. According to the report, this is the best-perceived value for the yellow metal since the survey was started in 2012.

“That gold in particular is now seen as better value speaks to investors’ anxiety about valuations in both equity and fixed income markets. Considered a safe haven and inflation hedge, gold may be a popular choice throughout 2018,” Will Goodhart, chief executive of CFA U.K.

The survey was conducted during the second quarter, which saw gold prices fall 10%. The market remains trapped in a five-month downtrend trying to hold critical support around $1,200 an ounce. December gold futures last traded at $1,202.80 an ounce, up 0.31% on the day.

It's not just in gold that market analysts see potential. The survey showed that 76% of respondents said that governments bonds are overvalued, down 4% from the previous quarter.

“The survey indicates a risk-off mentality amongst investors in Q2 2018, with those polled seeing most value in safe-haven assets,” the report said.

“Our survey suggests an overall decrease in risk appetite amongst investors. Respondents’ confidence in emerging market equities has declined, and investors are turning towards government bonds and gold. This shift is likely a response to global trade tensions and fears of increasing tariffs ultimately putting pressure on consumer prices,” added Goodhart.

Looking at stock markets, the survey said that 64% of respondents said that developed market equities were overvalued, relatively unchanged from the first quarter.

The survey noted that sentiment is still lower than the peak seen in the third and fourth quarters of 2016, adding that “it is clear that concern continues.”

The report also said that 76% of those surveyed said that corporate bonds were overvalued.

The survey was open to all CFA U.K. members and there was a total of 170 respondents.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.