Even though the Dow Jones Industrial Average and Standard & Poor's 500 Index have hit record highs this year, investing in gold remains the top investment pick in CNBC's latest All-America Economic Survey.
The March poll shows the yellow metal is the favored investment choice among 35% of respondents, beating real estate at 27% and stocks at 21%. This is the second year that investing in gold has topped the list of what those surveyed consider the "best investment" to make now.
While survey participants are more optimistic this year than last about the stock market, 21% are uncertain if now is a good time to dabble in stocks, up from 11% in December 2009.
Those who believe the current environment make it a good time to buy stocks jumped from 31% in November to 40%, the highest amount since December 2009.
Moreover, in spite of the improved outlook for stocks, the overall view of the current state of the economy remains bleak. Currently, 60% of those surveyed are pessimistic about the U.S. economy, up from 56% in November.
Why Investing in Gold Tops the List
Sequestration, quantitative easing and inflation are the basis for the glum economic outlook. Those factors also explain the glowing attraction to investing in gold.
Gold was once simply a safe haven investment. The precious metal provides a hedge against inflation. Many who are investing in gold maintain the position purely as a means to diversify a portfolio.
But gold has grown increasingly more attractive over the years for different reasons.
The yellow metal is good "insurance" against devalued currencies, and loose monetary policies and stimulus measures the world over have made paper money less valuable. As a result, investors and central banks have loaded up with gold.
Ongoing concerns over the ballooning federal budget deficit and national debt in the U.S. also have boosted gold prices. Concerns that global investors will lose faith in the U.S. government's ability to control its debt stand to make gold more valuable relative to the dollar.
Another reason to have faith in investing in gold: continued gold-buying activity of global central banks.