A golden opportunity?

When one of the world’s leading fund managers, renowned for his passion for equities, says every investor’s portfolio should have a heavy dose of exposure to gold, it is time to sit up and listen. That is exactly what happened when veteran manager Mark Mobius, a long-time investor in emerging markets, said he ‘loved’ gold and that investors should have at least 10% of their assets in the precious metal. His comments came as its price climbed to a six-year high of more than $1,413 (£1,125) an ounce.
According to experts at trader BullionVault, gold prices for UK savers have only ever been higher on 20 other occasions throughout history. It confidently predicts that by the end of the year, the all-time peak of £1,195 – reached in the summer of 2011 when debt crises were sweeping across Europe and the United States – could look ‘cheap’. The surge in gold prices has been fuelled by a number of factors including mounting geopolitical tensions in the Middle East, the continued trade war between the United States and China, and downward pressure on interest rates. This basket of concerns has highlighted gold’s status as a store of value and a safe haven during times of uncertainty.
Commentators believe that over the next decade deflation will dominate the economies of the United States and Europe, resulting in suppressed interest rates. In times of deflation, he says gold is a ‘good asset diversifier’ and proves popular as investors search for real, physical financial assets.

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