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Mark Mobius: 'Gold Is the Way to Go' as Rates Fall

Mark Mobius: 'Gold Is the Way to Go' as Rates Fall

By    |   Monday, 09 September 2019 10:01 AM

Investment guru Mark Mobius is bullish on gold as central banks around the world cut interest rates.

“Physical gold is the way to go, in my view, because of the incredible increase in money supply,” said Mobius, the founding partner of Mobius Capital Partners.

“All the central banks are trying to get interest rates down, they are pumping money into the system. Then, you have all of the cryptocurrencies coming in, so nobody really knows how much currency is out there,” Mobius recently told CNBC.

Investors should allocate about 10% of their assets in physical gold, Mobius, who manages about $4 billion in assets, told the Reuters Global Markets Forum. Mobius recommends that  the rest be invested in dividend yielding equities. That’s especially if the dollar gets weaker.

“The U.S. government, the Trump White House, does not want a strong dollar,” Mobius said.

“They are certainly going to try to weaken the dollar against other currencies and of course, it’s a race to the bottom. Because, as soon as they do that, other currencies will also weaken,” said Mobius.

“People are going to finally realize that you got to have gold, because all the currencies will be losing value,” he added.

“At the end of the day, gold is a means of exchange. It’s a stable currency in some way,” said Mobius.

Mobius has recently given a blanket endorsement to buying gold, saying accumulating bullion will reap long-term rewards as leading central banks loosen monetary policy and the rise of cryptocurrencies serves only to reinforce demand for genuinely hard assets. 

“Gold’s long-term prospect is up, up and up, and the reason why I say that is money supply is up, up and up,” Mobius, who set up Mobius Capital Partners LLP last year after three decades at Franklin Templeton Investments, recently told Bloomberg TV.

He added: “I think you have to be buying at any level, frankly.”

Gold has hit a six-year high this month on prospects for easier monetary policy from the Federal Reserve and other central banks to support growth that’s been impacted by the prolonged trade war between the U.S. and China. With the U.S. Treasury market signaling that a recession may be on the horizon, investors have been swarming into bullion-backed exchange-traded funds.

Material from Bloomberg and Reuters has been used in this report.

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Investment guru Mark Mobius is bullish on gold as central banks around the world cut interest rates.
mark mobius, gold, rates, invest
Monday, 09 September 2019 10:01 AM
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