Gold Most Favored Investment This Year, World Gold Council Says

Feb. 25 (Bloomberg) -- Gold is the most favored investment this year ahead of investment-grade bonds and other assets, according to a survey of investment advisers, the producer-funded World Gold Council said.

About 60 percent of the 31 advisers surveyed in Europe expect investors to take fewer risks this year compared with 2008, while about 30 percent expect investors to be less risk averse, the London-based council said today in a report. Almost 60 percent expect better market conditions this year.

More than $28 trillion has been erased from the value of global equities in the past year as credit losses and writedowns reached $1.1 trillion. Gold, trading at $970.60 an ounce in London at 3 p.m. today, reached an 11-month high of $1,006.29 on Feb. 20. Demand for a store of value has pushed bullion assets in exchange-traded funds to all-time highs.

“In today’s market, safety and stability are at the forefront of investors’ minds,” Marcus Grubb, the council’s managing director of investment research and marketing, said in the report. “Further de-risking” will likely continue this year because of “uncertainty over the financial landscape, combined with future inflationary fears resulting from interest rate cuts and quantitative easing by central banks.”

The majority of respondents are more concerned with counterparty risk and volatility than lower-yielding investments, the council said.

The following is a table of preference for 10 investments. A figure of 1 is most favored and 10 is least favored.



Asset Average Ranking

Gold 3.97
Investment Grade Credit 4.13
Commodity Basket 4.71
Cash 4.74
Alternatives 5.39
Equities 5.42
Oil 5.65
Gilts 6.32
Non-investment Grade Credit 6.45
Property 6.84