Renowned investor Mark Mobius has predicted that global currency devaluation is on the horizon, and is advising that investors put 10% of their portfolios into gold.
Often hailed as the “pied piper of emerging markets,” Mobius has made a name for himself as an industry expert. Mobius has been a long-term fan of the yellow metal, and sees new urgency in allocating investment to gold given the ongoing COVID-19 pandemic. In an interview with Bloomberg he said, “currency devaluation globally is going to be quite significant next year given the incredible amount of money supply that has been printed… 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 isn’t the only well-known investor to see value in gold. John Paulson, who bet against the housing market in 2008 and became a billionaire, told Bloomberg TV that “as inflation picks up … the logical place to go is gold. But because the amount of money trying to move out of cash and fixed income dwarfs the amount of investable gold, the supply and demand imbalance causes gold to rise.”
Spot gold prices got a bump at the end of last week, thanks to a drop in treasury yields and a dip in the strength of the dollar. This came off the heels of a speech from Fed chair Jerome Powell who indicated that the U.S. central bank could start tapering its support of the U.S. economy by the end of the year, which is a much slower timetable than many anticipated.
The Delta variant continues to be an x-factor as further lockdowns or COVID-19 surges could result in the need for another round of stimulus.
Investors can get exposure to gold through the Sprott Physical Gold Trust (PHYS), which holds physical gold bullion. Sprott also offers two actively managed precious metals mining ETFs: the Sprott Gold Miners ETF (SGDM), which tracks gold majors, and the Sprott Junior Gold Miners ETF (SGDJ), which tracks junior gold miners.
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