A recent Gallup poll reveals that gold is considered the second-best long-term investment option by Americans, surpassing stocks, bonds, and savings accounts.
The survey indicates a significant shift in perception, with 26% of respondents now considering gold as the best long-term investment, compared to just 15% in 2022, elevating it to the second spot, overtaking stocks.
Real estate, which has held the top position since 2013, still maintains its lead with 35% of Americans rating it as the best long-term investment. However, this is a noticeable decline from the previous year’s record high of 45%.
Stocks secure the third position with 18% of respondents favoring them, followed by savings accounts/CDs at 13% and bonds at 7%.
When cryptocurrency was included as an option, it received 4% of the votes, showing a decrease from the 8% it received in 2022.
Louise Street, a senior markets analyst at the World Gold Council, pointed out that while higher interest rates have diminished the perception of real estate as the best long-term investment, gold’s perception remains unaffected.
In fact, the number of Americans considering gold as the best long-term investment nearly doubled this year compared to the previous year, despite interest rates reaching a 16-year high in March.
The findings of the Gallup poll align with the data on gold demand, which reached an 11-year high in 2022. This surge was primarily driven by central bank gold purchases and physical gold investments.
Globally, the demand for gold bars and coins grew by 2% in 2022, building on the strong demand witnessed in 2021. Investors worldwide purchased a total of 1,217 tons of gold bars and coins. The second half of the year witnessed particularly strong demand, with two consecutive quarters recording around 340 tons of demand for the first time since 2013.
Gold's appeal was particularly strong among Western investors, leading to a new annual record. Combined purchases of gold bars and coins in the United States and Europe reached 427 tons, surpassing the previous record of 416 tons set in 2011.
While institutional investors have sold gold due to concerns over inflation and anticipated rate hikes by the Federal Reserve, Louise Street speculates that inflationary pressure on US consumers might be driving the demand for gold as a hedge against inflation.
The Gallup poll also highlights that confidence in savings accounts and cash deposits as a good long-term investment has only seen a slight increase this year, even with cash deposit rates reaching 5%. However, these rates are still relatively low in real terms, and individuals expecting persistent inflation may find gold's long-term investment proposition more enticing than that of savings accounts. Research suggests that gold is widely recognized among investors for its ability to protect against inflation and currency fluctuations.
According to the World Gold Council, American investors acknowledge the long-term value proposition and safe-haven attributes of gold. Around two-thirds of investors agree that gold serves as a safeguard against periods of political and economic uncertainty and that the price of gold tends to increase over time.