Investor sentiment hit gold and Japanese shares in August and prices declined, but positive feelings about sterling asset classes increased.
August saw the largest fall in sentiment towards gold since May 2013, according to the Lloyds Bank Private Banking Investor Sentiment Index.
Investor sentiment for gold declined 24 percentage points from July’s level, meaning gold fell from the second most in-demand asset class in July, to the fifth weakest in August.
The shift in sentiment could be a sign that investors are turning away from safe-haven assets, the researchers suggest.
Japanese shares saw the second biggest monthly decline in sentiment, which was likely in response to the fall in China shares, the researchers say. However, they also note that, overall, Japanese equities are on a “substantial recovery path” largely due to the Bank of Japan’s monetary policy support programme.
For the first time since the survey began in March 2013, all four sterling-denominated asset classes displayed the strongest investor sentiment.
Net sentiment was strongest for UK property (54%), then UK shares (37%), UK government bonds (20%) and UK corporate bonds (18%). UK shares gave the highest return in July, the researchers say.
Sentiment towards Eurozone shares saw its first increase in three months, rising four percentage points to -44%.
Ashish Misra, head of portfolio specialists at Lloyds Bank Private Banking, says: “While we would expect to see gold do well in times of volatility, investors have generally held their nerve and reached out to other asset classes for returns. In addition, with the price of gold falling to a five-year low last month, the potential long-term outlook for gold is modest.”
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