Physical gold is the way to go, in my view, because of the incredible increase in money supply,
Mark Mobius added “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 comments ring true as due to predictions of slow global growth banks around the world have been lowering interest rates in an attempt to boost money flow in the economy.
Due to this Mobius has officially recommended that investors have 10% of wealth in physical gold. This is due to his belief that the U.S is purposely devaluing the dollar so as to weaken all other currencies.
People are going to finally realise that you got to have gold, because all the currencies will be losing value.
When currencies weaken the price of gold usually is boosted, it is known as a safe option when the market is unpredictable.
Banks & Gold
World Gold Council released data confirming that the demand for gold from banks is increasing. In the first half of 2019 banks purchased 374 metric tons of gold, which is the largest increase in that times scale since 2000.
Mobius comments on this saying “Deep down inside, the central bankers do believe in gold, but they don’t want to say it because … they won’t be able to create new currency,”
According to reports from the World Gold Council, 11% of markets and developing economy banks have increased gold reserves over the next 12 months. These figures are very similar to 2018 when 12% increased demand for gold.
The World Gold Council commented “The planned purchases are being driven by higher economic risks in reserve currencies. In the medium term, central banks see changes in the international monetary system, with a greater role for the Chinese renminbi and gold,”
It is also believed that China is heavily investing in gold, with the central bank in China adding to gold reserves over the past eight months. It’s clear that it’s gold all over again.
Mobius comments of Chinas investments saying “China is the biggest producer of gold to begin with. And then of course, they’ve been buying gold, so nobody really knows how much they have in the vaults,” adding “I’m sure it’s been increasing at a pretty good pace.”