Senior portfolio manager at 7IM Peter Sleep said any new purchase of gold should be considered “speculative” rather than defensive. His warning comes after investors have been turning to gold because of its potential to perform well in the current environment. The price of gold has reached a seven-year high and the asset may not be a safe haven for investors if stock markets plummet further.

The price now stands at $1,729 (£1,382) per ounce – the highest it has been since 2013.

The price jumped by nearly 20 percent this year, while global stock markets experienced a fall of around 15 percent.

During turmoil, gold would usually be seen as a safe investment.

This is because it tends to hold its value even if inflation is rising.

While the amount of paper currency available depends on the amount that is made, there is a finite amount of gold in the world.

Mr Sleep told The Telegraph: “It is actually an imperfect hedge against a crisis.

“The value of gold is better linked with the value of the dollar.”

He advised investors to turn to a range of bond a property investment trusts instead of reaching for gold.

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He said he did not expect hyper inflation to happen.

And he predicted the economic recovery to be similar to that which occurred following the 2008 global financial crash.

James Sullivan, UK managing director at Miton Optimal, said there are many aspects of gold which prove attractive to investors time and time again.

He told FT Adviser: “We held around 6 per cent of gold at the turn of year, we are now north of 10 per cent.

“We increased our exposure in January and again during the setback in spot price during March.

“The attractiveness of gold is multi-dimensional and it plays an important part within a multi asset toolbag.

“Right now, with further monetary debasement and the credit worthiness of bond issuance plummeting, gold looks well placed to add value in the near term whilst potentially offsetting some of the volatility one can expect to witness in more conventional asset classes.”

On Wednesday a jump in the price of oil and the promise of more government stimulus to ease the economic pain inflicted by the coronavirus pandemic helped global equity markets surge.

This prompted investors to edge out of perceived safe-haven assets like US Treasuries.