Singapore: Veteran investor Mark Mobius says that gold’s set to push higher, potentially topping $1,500 an ounce, as interest rates head lower, central banks extend purchases, and uncertainty surrounding geopolitics and cryptocurrencies fans demand.
“I love gold," Mobius, who set up Mobius Capital Partners LLP last year after three decades at Franklin Templeton Investments, said in an interview in Singapore, adding bullion should always form part of a portfolio, with a holding of at least 10%. “As these interest rates come down, where do you go?"
Gold has rallied in 2019, rising to the highest level in six years, as investors contemplate slowing economic growth, prospects for easier monetary policy in the US and Europe, and festering trade frictions. The upswing has been given added momentum as central banks, including authorities in Russia and China, step up purchases. A revival in crypotocurrencies may lead to spillover demand from investors for the older haven, according to Mobius.
“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."
Spot gold -- which hit $1,439.21 an ounce on 25 June, the highest since 2013 -- traded at $1,414 on Thursday. It’s up 10% this year after the Federal Reserve signaled a willingness to cut rates and other central banks considered fresh stimulus. It last topped $1,500 in April 2013.
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