Marc Faber, author of the Gloom Boom & Doom Report, believes the gold market has reach the bottom range of its cycle lows. Following months of suggestions that the gold price could move down to the $1,200 level, has admitted that the gold market has hit the bottom. He added, that he can not be sure that Gold will not make a new high this year, but according to Faber the market have bottomed out and some gold mining shares have become very very inexpensive compared to the reserves they have.The Swiss investor thinks also, that in the current environment where it is clear that the worse the economy becomes the more the money printers will be at work, that to own a currency whose supply can not be increased at the will of some clowns that occupy the central banks is a desirable investment. In the beginning of the year, on January 17th, Faber was unconvinced the rebound from the steep correction of 20.7 percent to $1,523.90 on December 29 was over.
According to him, the spectacular and seasonally unusual summer rally of 2011, which took gold to $1,923.70 on Sept. 6, up 32.4% from the low of $1,452.60 set on May 5 , which is a 132 percent compounded annual rate, hadn’t flushed out all of the remaining weak hands. Faber admitted that he likes the gold, but he feels that the correction is not over yet.
In the months of April and May, Faber held firm about his fear of another leg down for gold, suggesting that, to be safe, investors should dollar-cost average into building a gold position for the next leg up in the ongoing bull market in precious metals.
Marc Faber is a Swiss investor who serves as director or advisor of a number of investment funds that focus on emerging and frontier markets, including Leopard Capital’s Leopard Cambodia Fund and Leopard Sri Lanka Fund. He has a reputation for being a contrarian investor and has been long term bearish about the American economy.
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