Marc Faber, publisher of the Gloom, Boom & Doom Report, thinks
stocks have shot to overvalued levels; therefore, it continues to make
sense to own gold.
Stocks will either endure a 20 percent correction this year before
making a definitive move higher, or they will suffer through a
1987-style crash, when the market rose early in the year then dropped
more than 20 percent in a single day in October, he tells CNBC.
Stocks already have soared more than 100 percent from their March 2009
lows, Faber notes. “I think investors who today are rushing to stocks
need to be reminded” of the market bottom exactly four years ago.
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“It will end badly this year.”
Faber sees gold’s 18 percent drop from its record September 2011 high (to $1,569 an ounce early Friday) as a correction.
“I want to have something that is not a financial asset,” Faber says. “I
have bonds, I have real estate and I have equities.” Equities and real
estate are similar, even though they don’t always move in tandem, he
adds.
“A lot of these are paper assets, whereas gold physically held in a safe deposit box outside the U.S. has relatively low risk.”
In addition, Faber notes, “I would rather buy something that is relatively depressed than something that is relatively high.”
Meanwhile, some gold market participants see the 236,000 gain in U.S.
February payrolls as a bearish sign for the precious metal.
“The employment data is very positive and is pushing gold down,” Adam
Klopfenstein, senior market strategist at Archer Financial Services,
tells Bloomberg.
“This is a black eye for gold, as this data brings back the assessment of when quantitative easing may end.”
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