According to one noted gold bull, you should hold at least 10 percent in gold as declining interest rates begin to take hold.
In an interview with Bloomberg noted bull Mark Mobius, who set up Mobius Capital Partners LLP after three decades with Franklin Templeton Investments, said declining rates in Europe would cause a flight to gold.
“Interest rates are going so low, particularly now in Europe,” he said. “What’s the sense of holding euro when you get a negative rate? You might as well put it into gold, because gold is a much better currency.”
Subsequently, he said, holding at least 10 percent of your portfolio in the precious metal would be a good idea.
Gold has rallied in 2019 to its highest level in six years as investors weigh a range of factors: from trade wars to slowing growth.
That upside momentum has been given a bit of a boost of late with both the US and the European Central Bank signalling that rate cuts could be on the cards.
Meanwhile, both Russia and China have been buying up gold in increasing amounts.
Spot gold — which hit $US1,439.21 an ounce ($A2,048) on June 25, the highest since 2013 — traded at $1,413.50 on Thursday.
It’s up 10 percent this year after the Federal Reserve signalled a willingness to cut rates and other central banks considered fresh stimulus. It last topped $1,500 in April 2013.
Mobius isn’t the only high-profile gold fan as prices climb. Billionaire trader Paul Tudor Jones has listed the metal as his favourite pick over the next 12-to-24 months, saying that prices could move to $1,700 once they breach $1,400.
This content does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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