UK retail investors flock to gold amid market uncertainty
UK retail investors are flocking to gold amid increased uncertainty over tariff policy and an uptick in capital gains tax, from which the precious metal is exempt.
Almost six in 10 investors surveyed by Charles Schwab UK (58 per cent) think that gold will increase in value over the next year, the highest number of any asset class.
Confidence in gold has only increased since last year, and now tops traditional investments such as the FTSE 100, with only 39 per cent of investors believing the index will increase in value over the next 12 months.
Nearly a quarter of investors increased their holdings in precious metal stocks, including 31 per cent of young investors in the past three months as market volatility has ramped up thanks to US president Donald Trump’s trade wars.
Gold prices boom
As Trump’s ‘Liberation Day’ hit financial markets, the Royal Mint reported an uptick in the number of customers buying physical gold, such as coins and bars. Investors have also been encouraged to buy the precious metal thanks to the increase in capital gains tax at the end of last year, noted Toby Osborne, head of wealth management at the Mint.
The performance of gold doesn’t just extend to the substance, with 73 per cent of investors believing companies that produce precious metals are good options for investment, rising to 79 per cent among millennials, and compared to 70 per cent of investors who think AI stocks are a strong investment option.
In comparison, only 40 per cent of retail investors believe the value of the Dow Jones will increase over the next year, followed by 39 per cent for the FTSE 100 and 38 per cent for the Nasdaq.
The worst performing market surveyed was the French CAC 40, with only 23 per cent of investors believing the index will grow over the next year.
“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,” said Richard Flynn, managing director at Charles Schwab UK.
“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.”