INVESTORS should have 10% of a portfolio in gold as currencies would be devalued following the unprecedented stimulus rolled out to fight the coronavirus pandemic, said Bloomberg News citing Mark Mobius of Mobius Capital Partners.
At this stage, “10% should be put into physical gold,” said Mobius who spent three decades at Franklin Templeton Investments before setting up Mobius Capital Partners. “Currency devaluation globally is going to be quite significant next year given the incredible amount of money supply that has been printed,” he told the newswire.
Bullion rallied to a record last year as the coronavirus pandemic spurred a flight to haven assets but it’s pulled back since with the roll-out of vaccines, said Bloomberg News.
To fight the crisis, central banks and governments worldwide have unleashed an unprecendented wave of monetary and fiscal stimulus, boosting balance sheets at the Federal Reserve and elsewehere and straining 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,” said Mobius.
Spot bullion, which traded near $1,815 an ounce, hit an all-time high above $2,075 about a year ago. Year-to-date, it’s shed more than 4%, while global stocks hold near a record and the Fed lays out a strategy to pare stimulus.
Investors have been turning away from bullion-backed exchange-traded funds amid the continued strength in equities. A global tally of gold-backed holdings has fallen 8.5% over the past 12 months, according to Bloomberg data.