Thursday, November 12, 2009
Depending upon where you get your news, Gloom, Boom, and Doomer Marc Faber thinks that, after the recent run-up, the price of gold will either:
- Dip to as low as $800 an ounce, or
- Never sink below $1,000 again
Legendary investing guru Marc Faber says gold price is rising without any fundamental factors and thus the price of the yellow metal will plunge to $900-$800 levels.Apparently, in this case, a weaker dollar will not be supportive of the gold price, a very curious statement indeed since many think that nearly everything is now rising in price because of the steady weakening of the U.S. currency.
Faber, celebrated author of Gloom, Boom & Doom Report says that gold prices will dip in the short term, falling to $800 an ounce from current values around $1,117.
"The US economy will require further stimulus packages, which will weaken the dollar, thus making government debt also a bad investment choice in the short term. Commodities such as oil and gold have been rallying on a weak dollar, but that will change as prices must correct," Faber wrote in a recent column.
(BTW - Is it just me or do others hear Dr. Faber's thick accent in their head whenever they read something in quotes attributed to him?)
On the other hand, gold bulls will take heart in this report from Bloomberg today that has the good doctor singing a completely different tune about the future of the gold price.
Gold won’t fall below $1,000 an ounce again after rising 27 percent this year to a record as central banks print money to help fund budget deficits, said Marc Faber, publisher of the Gloom, Boom & Doom report.Again with the accent when reading between the quotes...
“We will not see less than the $1,000 level again,” Faber said at a conference today in London. “Central banks are all the same. They are printers. Gold is maybe cheaper today than in 2001, given the interest rates. You have to own physical gold.”
China will keep buying resources including gold, he said.
“Its demand for commodities will go up and up and up,” he added. “Emerging economies will grow at the fastest pace.”
In contrast, Western countries will be lucky to avoid economic contraction, while the Federal Reserve will maintain interest rates near zero percent, he said.
Hopefully, that seed hasn't been planted in your head as well after reading this, though, it really isn't all that bad a thing to have happen to you now and then.