Gold recently hit an all-time record high price. But rather than try and build my wealth by buying the yellow metal, I am focussed on the UK stock market.

It has also been doing quite well lately, as it happens.

Like gold, the FTSE 100 index of leading blue-chip companies listed on the London stock market also hit an all-time high this month.

But that only tells part of the story, as far as I am concerned. Here is why I am putting money into British shares right now.

The value of a productive asset

I remember billionaire investor Warren Buffett being asked why he did not invest in gold many years ago.

His response was that gold buyers paid some people to dig the precious metal out of one hole in the ground, before it was moved to another hole in a ground that they paid other people to guard.

In other words, gold is an unproductive asset. By contrast, a gold mine can be a productive asset: owning it, one could potentially benefit from any profits made by mining and selling gold.

In general, I like shares of productive assets. Owning a tiny part of British American Tobacco, for example, I earn a sliver of money every time someone buys a packet of Lucky Strike cigarettes, thanks to the company’s dividend.

Dividends are never guaranteed. If a share I own loses all its value, I own nothing but a piece of paper. With gold at least I would own a glimmering paperweight. So, although, I am not buying gold, I am not just buying any old shares willy-nilly either. Instead, I am scouring the stock market for what I think are potential bargains.

On the hunt for mispriced gems

That may sound odd. If the FTSE 100 has hit a record high, why would there be bargain shares still available?

The FTSE 100 is only one part (albeit a significant one) of the London stock market. Even within it, though, some shares are doing much worse than the index overall.

Take JD Sports (LSE: JD) as an example. It has tumbled by a fifth so far this year.

Over the past five years, JD’s share price has gone nowhere (up a fraction of one percentage point), compared to a 66% gain for the FTSE 100.

But I recently added to my holding of the FTSE 100 sportswear retailer. Multiple profit warnings in the past year have shaken City confidence and I do see risks, from higher costs due to global tariffs to potentially weaker consumer demand if the economy slows.

Browsing in JD’s flagship Oxford Street shop last week, though, business struck me as fairly brisk. I reckon its proven formula, deep customer insight, global reach and exclusive products can all help JD deliver profits long into the future.

Its share price fall looks overdone to me for the long-term prospects I see when considering the business and poring over JD’s financial reports.

It is just one of the possible bargains I see in the UK stock market right now.