Is gold overvalued?

Gold is starting to bug some people.

More investors are viewing the long-running gold rally as overdone, according to a survey of fund managers released Tuesday by Bank of America Merrill Lynch.

Gold doubts rise too

A net 19% of global fund managers said gold is overvalued in the firm's latest survey, conducted last week. That's up from 12% last month.

Their worries certainly haven't held down the price of gold, which hit another intraday trading record Tuesday above $1,276.

The gold price is up 16% this year, as investors fret that central bankers will permanently damage the value of money by printing more to paper over the developed world's debt problem.

But gold skeptics note that the metal, precious though it may be, yields nothing -- a substantial caveat at a time when rising taxes and soft growth prospects make income a most desirable investment feature. What's more, even a highly appreciated gold investment must be converted back into paper currency to buy stuff.

The Merrill study canvassed 215 fund managers managing $579 billion, and gold isn't the only ascendant asset class they have their doubts about.

Two-thirds of respondents say bonds are overvalued – though they aren't exactly putting their money where their survey forms are. The proportion of asset allocators saying they are underweight bonds in their portfolios dropped, to 15% from 23% a month ago.

By contrast, three in eight surveyed say stocks are cheap. The spread between the bearish-bonds and bullish-stocks figures exceeded 100 points for the first time in seven years of surveys, a result BofA chalked up to "a heightened sense of caution."

Accordingly, managers are increasing their cash allocation, with twice as many overweight cash in the latest survey than a month ago, BofA said.