Others may veer away from the high price of gold, but Gloom, Boom and Doom editor Marc Faber says the precious yellow metal is “dirt cheap.”
In the face of what he describes as "failed Keynesian policy," Faber says his investing strategy is to continue to accumulate more gold and remain diversified.
"In fact, I could make an analysis to show that the price of gold today is probably cheaper than when it was $300 per ounce based on the increase in government debt, based on the increase in monetary base in the United States and based on the expansion of wealth in Asia, Faber tells moneycontrol.com.
(Newsmax file photo)
Gold futures for December delivery fell $46.20, or 2.5 percent, to settle at $1,813.30 at 1:30 p.m. Monday on the Comex in New York, Bloomberg reported. Gold touched an all-time high of $1,923.70 an ounce on Sept. 6.
"If I could compare say the gold price to the increase in wages in China and India over the last 10-20 years, then the price of gold is not particularly high."
Since early June, bonds and gold have rallied and equities have gone down, says Faber.
“There are some uncorrelated assets and that is why I am telling individuals — you have to diversify because we don’t know how the world will look like in five years time,” he says.
The metal is in the 11th year of a bull market, the longest winning streak since at least 1920 in London, as investors seek to diversify away from equities and some currencies. Gold is up 28 percent this year, beating global stocks, commodities and Treasurys, Bloomberg reported.
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