More than two-thirds of fund groups (69%) identified gold as a prominent safe haven asset, despite volatility in the yellow metal’s price this year, according to Quilter’s latest Investor Trends survey.
The yellow metal peaked at more than $5,400 per troy ounce this year, but has since slid to below $4,300, according to data from Trading Economics.
The announcement of Kevin Warsh as the next governor of the Federal Reserve and turbulent geopolitics have all sent the precious metal whipsawing this year.
Lindsay James, investment strategist at Quilter, said: “While events in Iran and the Middle East are clearly preoccupying minds today, it is interesting to see gold retain its safe haven status despite the extreme price moves we have witnessed in the last 12 months.”
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Cash and US treasuries followed as the other most popular safe haven assets.
However, James noted fund management groups were not all bullish on all US assets. Only 19% of respondents expected American mega-cap stocks to outperform the broader market next year, according to the survey.
Meanwhile, 69% of respondents said recent political instability had impacted their demand for gilts.
Should UK Prime Minister Keir Starmer be replaced by a more left-wing candidate, all respondents said gilt yields would rise. For 94% of respondents, this would reduce business confidence, and for half of asset managers, it would damage growth.
James said: “One thing is for sure, however – while fund groups want to see improvements from the current government to stimulate growth, the current alternatives do not seem appealing and, as such, allocations are being adjusted accordingly.
“Even if Starmer is to survive as prime mnister, he may pay the price by pursuing more left wing policies as a result,” James added. “This too is likely to have a negative effect on markets, especially gilts, and the UK fiscal position is simply not strong enough not to consider the impact.”
Quilter’s Investor Trend survey is conducted quarterly by several fund management institutions and covers their forecasts for macroeconomic and market indicators. This recent survey was conducted before the eruption of conflict in the Middle East.
See also: Markets whipsaw as Trump reveals peace talks with Iran
