UK companies and the Treasury benefit as investors ditch gold

Chris Papadopoullos
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Gold prices recently hit a five-year low and have fallen 15.8 per cent over the past 12 months
INVESTORS are turning to UK assets over gold as the price of the commodity declines, according to a survey of investors.

Investors are more confident lending to the Treasury, with net sentiment towards UK government bonds edging up to 19.86 per cent in August from 18.64 per cent in July, the research from Lloyds Bank shows today.

Net sentiment shows the diff­erence between those who hold a positive view and those who do not on the outlook for each type of investment over the next six months.

UK company debt also saw a rise in net sentiment to 17.61 per cent from 12.49 per cent. Both UK company and government debt have seen big climbs over the past 12 months.

It came as investors lost faith in gold, with net sentiment towards the precious metal falling to 11.4 per cent from July’s 35.62 per cent.

Commodities have become less attractive after an economic slowdown in China, the world’s second biggest economy and a major commodities importer.

Many commodities are also priced in dollars, which means they tend to fall in price as the dollar rises in the value. Net sentiment towards commodities dropped to 5.41 per cent from July’s 9.89 per cent.