We will eventually see much higher gold prices, says Marc Faber
Sponsored LinksINTERNATIONAL. Marc Faber, the Swiss fund manager and Gloom Boom & Doom editor and publisher expects much higher gold prices as major currencies lose their purchasing power in the current financial crisis.
“Gold price could easily drop to US$700 per ounce before it enters into a rise but one will see much higher gold prices eventually because paper money is over time losing its purchasing powers in the world. It’s very clear that every currency is losing its purchasing power in the world”, Faber told India’s CNBC-TV18.
Responding to a question on whether global markets have finally bottomed out Faber said: “Maybe the worst of the financial crisis has been seen, but I will give you an example, General Motors was at US$94 in 1999. It rallied 33% but it’s still at US$6. People say the market has rallied 10% and stocks like Morgan Stanley went up 86%, but they are still way below the previous peaks and losses that are colossal in the investment community.”
“We have to see the rally in the context of everything, the market was already oversold when it was at 1200 and then it went down to 831 on the S&P and became statistically unbelievably oversold. ”
“It was probably the most oversold condition ever. Now we have a rebound and these rebounds can be in the order of 20%-30% and then traditionally usually you have a retest of the lows. I am not saying the lows will be retested. But usually there is a retest.”
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