Hold 10% in gold as currencies will be devalued - Mark Mobius

Gold prices were pushed from $1,500 an ounce in January to an all-time high of $2,072 in August 2020

  
Image used for illustrative purpose. Gold biscuits are displayed inside a jewellery showroom in Hyderabad.

Image used for illustrative purpose. Gold biscuits are displayed inside a jewellery showroom in Hyderabad.

REUTERS/Krishnendu Halder

Veteran investor Mark Mobius has stated that investors should allocate 10 percent of their portfolios to gold as he expects currencies to be devalued after the unprecedented worldwide stimulus rollout as part of the fight against the economic setbacks triggered by COVID-19.

In an interview with Bloomberg, the founder of Mobius Capital Partners said, “Ten percent should be put into physical gold. Currency devaluation globally is going to be quite significant next year, given the incredible amount of money supply that has been printed.”

Gold is traditionally seen as a safe haven investment. When the coronavirus ripped across the world, tanking economies and crashing businesses through lockdowns, investors bought record amounts of gold.

Due to those investments, prices were pushed from $1,500 an ounce in January to an all-time high of $2,072 in August 2020. Forecasters and analysts, including the Bank of America (BofA), had said it could soon reach $3,000.

However, bullion prices started the 2021 calendar on a weaker note due to highly effective vaccine rollouts across the world and central banks globally resorting to an unprecedented wave of monetary and fiscal stimuli to tide over falling state finances. 

“It is going to be very, very good to have physical gold that you can access immediately without the danger of the government confiscating all the gold,” Mobius said in the interview.

According to Reuters, spot gold was steady at $1,816.51 per ounce by 1129 GMT, after earlier hitting its highest since August 4 at $1,822.92.

Gold price is likely to move higher to the $1900-mark by the year-end, averaging around $1800 in 2021, according to analysts at BofA

(Writing by Seban Scaria; editing by Anoop Menon)

 seban.scaria@refinitiv.com

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© ZAWYA 2021


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