INVESTORS is expected to have 10% of a gold portfolio as currencies would devaluate following the unprecedented stimulus deployed to fight the coronavirus pandemic, Bloomberg News said citing Mark Mobius of Mobius Capital Partners.
At this point, “10% should be invested in physical gold,” said Mobius who spent three decades at Franklin Templeton Investments before forming Mobius Capital Partners. “The devaluation of the currency on a global scale will be quite large next year given the incredible amount of money supply that has been printed,” he told the newswire.
Bullion hit a record high last year as the coronavirus pandemic spurred a flight to assets, but it has since receded with the rollout of vaccines, Bloomberg News said.
To combat the crisis, central banks and governments around the world have unleashed an unprecedented wave of monetary and fiscal stimulus, inflating balance sheets at the Federal Reserve and elsewhere and straining state finances.
“It will be very, very good to have physical gold that you can access immediately without the risk of the government confiscating all the gold,” Mobius said.
Spot bullion, which was trading near $ 1,815 an ounce, hit an all-time high above $ 2,075 about a year ago. So far this year, it has lost more than 4%, as global equities hold near record highs and the Fed plans a strategy to cut stimulus measures.
Investors have turned away from bullion-backed exchange-traded funds due to continued strength in stocks. The global tally of gold-backed holdings has fallen 8.5% in the past 12 months, according to Bloomberg data.