PRECIOUS metals were the top-performing investment for the second consecutive year during 2010 with their value soaring by 42% as people sought a safe haven from inflation.
According to Lloyds TSB, it was the fourth time in five years that precious metals topped the tables for the best asset class, as continuing uncertainty over the prospects for the global economy caused investors to flock to gold, silver and platinum.
The value of precious metals has surged by 365% during the past 10 years, nearly double the increase for the next best-performing asset during the same period; residential property, which made a gain of 198%.
The steep rise in precious metal prices during 2010 was driven by silver, with its value jumping by 80%, significantly outstripping the 29% rise in the price of gold and the 20% increase for platinum.
The group said the price of silver had been boosted by pressure on the supply of the metal, as demand remained high from both investors and industries which use it.
Commodities were the second best-performing asset class during 2010, offering returns of 30%, while they were the third best over the past decade, with a 176% increase in value. They were also the best-performing asset during the first two months of 2011, driven by a 38% jump in the price of cotton since the start of the year.
All nine asset classes produced a positive return during the past year, although people who held their money in cash would have seen it rise by just 0.6%, while residential property fared little better with a gain of 1.2%. UK shares and commercial property both returned 14.5%, while the value of international shares rose by 10.6%.
Lloyds TSB economist Suren Thiru said: “The level of demand from emerging economies, particularly from China and India, is likely to remain an important determinant of many assets prices as well as the pace at which the global economic recovery continues.”
