Mobius shuns record-breaking gold on risk of dollar rebound

Veteran investor Mark Mobius said gold has become unattractive after its historic rally, warning that a potential rebound in the dollar could undercut precious metals at a time when much of the market remains firmly bullish.

“I will not pick it up at this level, that’s for sure,” Mobius, managing director of Mobius Emerging Opportunities Fund, said in a Bloomberg Television interview on Friday, adding he would consider the metal if prices were 20% lower than today’s.

The dollar could strengthen from current levels as forecasts point to a turnaround in the US economy, a shift that would likely make precious metals less attractive, he added.

Mobius’ cautious view follows gold’s best year since 1979, driven by central bank purchases, lower rates and investor demand from the so-called debasement trade, where worries over rising debt push investors away from government bonds and currencies. The outlook remains positive for many investors, as most of the drivers that propelled gold last year remain intact.

Separately, Mobius said China, India, Korea, and Taiwan are the region’s most attractive stock markets for global investors, adding that China’s rally looks sustainable due to the nation’s strides in the technology sector.

“China’s goal now is to overtake the US in technology in high-level chips, in all kinds of AI,” Mobius, who has been investing in developing markets for about three decades, said. “The money is going in that direction, not in the consumers’ direction.”

He remains a bull on Indian stocks, citing the government’s move to increase spending and investments, particularly in the technology sector.

(By Abhishek Vishnoi, Haslinda Amin, Yihui Xie and Naman Tandon)