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All that glitters is gold……and silver

All that glitters is gold……and silver

Category: Investments

Updated: 13/07/2011
First Published: 13/07/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Precious metals continued to shine brightest among investors over the first half of 2011.

Against a backdrop of an uncertain global economy, gold and silver have proved to be the best performing asset class during the first six months of the year.

Precious metals have returned 4.9% in the period, although silver has seen the biggest rise, figures from Lloyds TSB show.

Silver significantly outperformed the other precious metals over the first half of 2011with prices rising by 14%; more than double the increase in gold prices (6.6%).

In contrast, there was a 1.9% fall in the value of platinum.

In addition to its position as a safe haven investment, high demand for industrial uses has contributed to the strong rise in the price of silver.

"Precious metals continue to provide the best returns for investors against a backdrop of continued anxiety over the prospects for global economic growth and concerns over Eurozone sovereign debt risk and high inflation," said Suren Thiru, economist at Lloyds TSB.

Precious metals could be considered an investor's best friend, as figures show that they have returned 36% in value over the last year, and a massive 416% in the last decade.

"Precious metals have benefited from lower interest rates over recent years as well as their position as a hedge against inflation and financial market uncertainty."

Commercial property recorded the second highest return (3.7%) albeit from a low base, followed by international equities (3.2%).

However, the average return from the nine asset classes over the first half of the year of 2.3% was much weaker than the returns enjoyed over the same period in 2010 (13%).

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