Investors are "too optimistic" on gold with the commodity set to decline amid expected headwinds in the second quarter of 2019, according to research by Fidante Partners, while most asset classes are set for either a "recovery" or "boom".
In its quarterly Hype Cycle report, which analyses investment sentiment in financial markets via Google searches, ETF flows and the premium over the net asset value of relevant investment trusts, the firm found gold and catastrophe bonds to be the only asset classes to be showing a "negative momentum signal".
Fidante said gold, which had been in boom territory in the first quarter hype cycle, has seen its price stall but investor interest has not, thereby creating "an overhyped situation".
The firm said that while institutional investors have largely "shunned" gold in their portfolios, it has been a "perennial favourite" of global private investors around the world.
Demand for gold bars and coins rose 4% in 2018, according to The World Gold Council, as holdings of physical gold funds around the world grew by 2.9%.
However, Fidante highlighted this increase in demand has coincided with gold prices delivering an annual return of just 1.1% over the same time period as investors have "not put their money where their Google search is".
While annual growth in gold ETF and fund holdings has hovered at around 3% globally in recent months, the commodity has seen exceptional growth in popularity in Europe, where holdings have increased by 11.7% over the past 12 months.
This is particularly true in Germany and the UK, where holdings have grown by 21.7% and 13.8% respectively over the period.
The firm added that gold is also overhyped and heading for a negative quarter as a result of the "seasonality in its price pattern", with the asset class typically bottoming out in June before rallying into year-end.
Head of investment research at Fidante Joachim Klement said: "The one asset we are cautious about the returns for the next three months is gold.
"Sentiment for gold is too optimistic, in our view, and investors are not following through on this positive sentiment by investing into physical gold ETFs and funds.
"Given the seasonal decline in demand for physical gold in the second quarter, we expect gold prices to decline in the coming months."
By contrast, the report is optimistic about listed property companies, which are marked in the "boom" category in the US, EU and UK, as well as REITs.
The report explained that US and European property stocks have outperformed global equity markets over the past three months, while UK property stocks have lagged only slightly.
In addition, REITs - defensive assets, typically expected to underperform in an equity market rally - have benefited from declining long-term interest rates.
However, despite this strong performance, Fidante said its hype index "signals no exuberance on the part of investors" and there is "still ample room for improvement in sentiment and increasing fund inflows in the coming months", which means "sentiment should continue to remain supportive for now".
Klement added: "Given our assessment of the current sentiment and price momentum of risky assets, we expect the current market rally to continue in the second quarter of 2019.
"This is true in particular for REITs, which benefit from moderately optimistic sentiment and accelerating price momentum. These two drivers should continue to propel REIT prices higher in the next three months, so it is by no means too late to invest in these asset classes."