Tags: Faber | media | gold | bug

Marc Faber: Media Responsible for Gold's Decline

By    |   Wednesday, 18 June 2014 09:59 AM

Gold has dropped more than 30 percent since hitting a record high of $1,934 in September 2011, and Marc Faber, publisher of the Gloom, Boom & Doom Report, has an interesting explanation for the move.

Investors are staying away from gold "because the media doesn't like gold," he told CNBC.

"Nobody at CNBC owns gold. Nobody at Bloomberg owns gold. Gold is being constantly talked down by the media, and Fed officials, and economists, who also don't own any gold. They're all stocked up in equities."

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Faber doesn't like the terminology used by the media to describe gold bulls. "When people talk about people who are optimistic about gold, they call them 'gold bugs,'" he noted.

"A bug is an insect. I don't call equity bugs 'cockroaches.' There is already a negative connotation with the expression of 'gold bug.'"

Faber said he has about a 25 percent exposure to gold and recently purchased some when it fell.

"Nothing is particularly cheap, [but] gold is relatively cheap compared to equities at the present time," he argued.

Gold fell from a two-month high in London Friday on speculation that gains were exaggerated as investors sought to close out bearish positions after the Federal Reserve said it expects interest rates to stay low.

“It’s clear that investors are quite nervous, and this largely springs from the large volume of gross shorts in the market,” UBS analysts including Edel Tully wrote in an e-mailed note, Bloomberg reported.

“We’re not convinced that gold’s recent rally has further longevity. A re-basing of expectations post-Fed conference, which had near-term tones of hawkishness and further-out tones of dovishness, did not warrant gold’s $50 surge.”

Gold for immediate delivery fell 0.7 percent to $1,311.18 an ounce at 10:39 a.m. in London, after touching $1,322.12, the highest since April 15, according to Bloomberg generic pricing.

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Gold has dropped 34 percent since hitting a record high of $1,934 in September 2011, and Marc Faber, publisher of the Gloom, Boom & Doom Report, has an interesting explanation for the move.
Faber, media, gold, bug
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2014-59-18
Wednesday, 18 June 2014 09:59 AM
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