Hold 10% in gold as currencies will be devalued: Mobius

Singapore

VETERAN investor Mark Mobius said investors should have 10 per cent of a portfolio in gold as currencies will be devalued following the unprecedented stimulus rolled out to fight the coronavirus pandemic.

At this stage, "10 per cent should be put into physical gold," said Mr Mobius, who set up Mobius Capital Partners after more than three decades at Franklin Templeton Investments. "Currency devaluation globally is going to be quite significant next year given the incredible amount of money supply that has been printed."

Bullion rallied to a record last year as the coronavirus pandemic spurred a flight to haven assets but it has pulled back since with the roll-out of vaccines.

To fight the crisis, central banks and governments worldwide have unleashed an unprecedented wave of monetary and fiscal stimulus, boosting balance sheets at the Federal Reserve and elsewhere 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," Mr Mobius, a long-time fan of the metal, said in an interview.

Spot bullion, which traded near US$1,815 an ounce, hit an all-time high above US$2,075 about a year ago. Year-to-date, it has shed more than 4 per cent, 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 per cent over the past 12 months, according to Bloomberg data. BLOOMBERG