Spooked by the sharp downturn for gold, investors are turning their back on the commodity, according to a new report.
The International Investor Attitudes report, which is compiled by financial services firm Friends Provident, says gold has dropped in popularity by 66% of investors surveyed in Hong Kong, Singapore and the United Arab Emirates.
However, 22% of investors still believe gold to be a ‘very good’ investment and another 38% consider the precious metal as ‘good’.
Gold wasn’t the only asset class to take a knock – property also fell in the index used by the firm though investors felt fairly confident about equities, currencies and bonds.
In the index, gold and property are still the most popular assets to hold, but they have lost some shine since the previous edition of the report came out.
Mining equities undervalued
The report also quotes Investec Asset Managers’ head of commodities, Bradley George, who says that the issue of Italy struggling to form a government highlights the Eurozone as being far from stable for investors.
“There was a more positive global growth outlook in the Federal Reserve minutes before their February meeting which has put the price of gold under pressure but we believe the long-term fundamentals for the commodity remain intact,” he explained.
He believes falling gold prices have led to gold mining equities to become undervalued and presents a major investment opportunity for investors.
The report is most revealing about attitudes to investment in the three countries surveyed.
For instance, investors in the UAE are the most positive about putting money in to property, as just 9% consider now a bad time for property, against 71% who say now is the time to invest.
Upbeat investors
In stark contrast, investors in Hong Kong and Singapore are less than enthusiastic about the property market, with just over a fifth – 21% in Singapore and 28% in Hong Kong – saying the market is unattractive for them.
Investors in Hong Kong are still more positive about the prospects for collectibles, but they also recorded the largest fall in sentiment towards holding cash.
Generally, investors in Singapore are more upbeat about investment classes and have positive views on all potential investments particularly for gold, cash and equities.
Investors in Hong Kong prefer a more balanced approach to their investment strategies and are more likely to consider long-term investments.
When asked about their feelings about being financially secure, 52% of those asked in Hong Kong admitted to feeling secure, while the figure was 53% in Singapore and UAE.
