Investing in gold splits investor opinion, says Barclays Stockbrokers

24 March 2009 / by Rachael Stiles
Opinion amongst investors is currently divided over whether or not to sell or hold when it comes to gold, according to analysis from Barclays Stockbrokers.

A third of investors are of the opinion that gold prices will continue to rise, as they have been intermittently since the outbreak of the credit crisis, and it is therefore still a good time to be investing in gold.

On the other hand are the 30 per cent of investors who think that gold prices have topped out and it is therefore time to sell before they inevitably start to decline.

In yet another corner are a cautious 18 per cent of investors who believe that gold will maintain its current value and that owners should therefore hold onto it.

The current economic climate drove the price of gold up to $1,000 a troy ounce in February, as investors rushed to it as a traditional safe haven from the turbulence of the wider markets.

Many investors perceive gold as being less susceptible to the fluctuations of other investments, and it has historically shown strength in times of financial crisis.

President Barack Obama's recent announcement of aggressive quantitative easing in the US has also served to push up the price of gold, Barclays Stockbrokers said.

"It is encouraging to see such a proportion of our investors bullish in their outlook for gold," said Barbara-Ann King, head of investment at Barclays Stockbrokers, "but there are options for both bull and bearish investors.

"For those investors who are confident and think gold prices will rise further, there is the option of adding to an existing investment, perhaps through a complementary product linked to gold. There are many products available in the market that retail investors can use to top up on gold exposure," Ms King said.

"For the gold bears out there who believe there is scope for the gold price to come down then considering a product that goes short on gold could be an option, such as an ETC designed to increase in value as the price of gold moves lower. Whatever investors views are on the outlook for gold, there are many opportunities for them at the moment within this interesting sector."

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