UK investors piling into gold as tariff tensions continue

Armchair investors are increasingly bullish about gold amid rising geopolitical tensions, market volatility and inflation fears, a new survey has revealed.

Almost six in ten personal investors - 58 per cent - polled by Charles Schwab UK believe that gold will increase in value over the next 12 months, an increase of five percentage points from last year.

The retail investors surveyed for the firm’s latest “investment forces” research now view gold as the most attractive asset class.

Gold prices have touched fresh record highs in recent weeks amid global tensions.

It comes after gold prices rebounded following a sharp weekly drop. Safe-haven demand returned amid growing concerns about the US economic outlook in the wake of a downgrade of the US government’s credit rating by Moody’s. Despite last week’s fall, the price of gold has touched record highs this year amid stock market volatility and trade tariff concerns.

More than seven in ten investors (73 per cent) surveyed by Charles Schwab think that companies that produce precious metals such as gold, silver and platinum are a good option for investment. This proportion rises to almost eight in ten - 79 per cent - among millennials, and compares to 70 per cent of investors overall who believe that artificial intelligence-related (AI) stocks are a good investment option.

In comparison, confidence in the ability of stock market indices to return increased value over the next 12 months is significantly lower. Two in five (40 per cent) of retail investors believe the value of the US Dow Jones will increase over the next year, followed by 39 per cent who think the same of the FTSE 100 and 38 per cent who think the same of the Nasdaq tech-focused index.

With gold prices reaching record highs, the research also found that nearly a quarter of investors (23 per cent) have increased their holdings of precious metal stocks in the past three months, with over three in ten (31 per cent) of young investors bolstering their holdings.

Richard Flynn, managing director at Charles Schwab UK, said: “Amidst a backdrop of heightened geopolitical tensions, market volatility, and fears over levels of inflation, our study shows investors are increasingly bullish towards so-called safe-haven assets such as gold and other precious metals.

“While some investors are opting to invest in gold directly, others prefer to invest in mining stocks to gain exposure to gold within their portfolios. With gold prices reaching record highs, our thematic investment platform provides a simple and affordable way to invest in precious metal stocks.”

Susannah Streeter, head of money and markets at investment platform Hargreaves Lansdown, noted: “A more risk-off environment is emerging again, with gold climbing higher after its losses of recent weeks, as investors look again for shelter for some of their money. The dollar has not regained its safe-haven allure, instead it’s fallen back against a basket of currencies, as US economic risks loom.”

Linh Tran, market analyst at XS.com, added: “In the context of intertwined macro and geopolitical factors, gold prices are likely to continue trading within a narrow range as markets await clearer signals from the high-level dialogue and upcoming economic data to determine the next directional move.”