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Gold is decade's best-performing investment

Section: Daily Dispatches

By Myra Butterworth
The Telegraph, London
Saturday, March 6, 2010

Gold has proved to be the best value investment over the last 10 years, new research has disclosed.

The price of the precious metal rose 277 per cent during the past decade, with investors particularly attracted to gold during the recession as they sought a safe haven for their money.

Overall, gold, silver, and platinum increased in value by 242 per cent between December 1999 and December 2009, the equivalent of an average annual return of 13.1 per cent.

It means precious metals outpaced inflation, which has increased by 30 per cent during the decade or by an average 2.7 per cent a year.

Gold saw the biggest rise over the decade at 277 per cent, followed by platinum at 230 per cent and silver at 227 per cent.

Despite the slump in the housing market in the past two years, property has produced the second highest return after previous metals during the past decade of 187 per cent or 11.1 per cent a year, according to the findings by Halifax.

Shares saw an average return of just 18 per cent over the decade, while cash returned 57 per cent. It comes despite savers seeing their rates of return plummet to record lows after the Bank of England cut interest rates to just 0.5 per cent a year ago.

Suren Thiru, an economist at Halifax, said: "Precious metals were the top-performing asset during the noughties, largely reflecting increased demand from China and India for industrial uses and jewellery."

He said that the prospects for prices of investments such as gold and property will be driven in the year to come by the extent and pace with which UK and global economic conditions improve.

"Monetary and fiscal policy decisions, the outcome of the general election, and the strength of demand from China and India are all likely to be important determinants in 2010," he said.

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