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Wednesday, September 21, 2011

Gold is an insurance against a systemic failure

Marc Faber : I think it is important for investors to understand the role of gold as an insurance against a systemic failure and not necessarily as a hedge against inflation. I should add that I own gold for both reasons, believing that it will perform well in both an inflationary and deflationary environment. In addition, I am not selling any gold but traders should realize the gold price is extremely overbought and that it could easily drop toward the 200-day moving average – that is, between $1,500 and $1,600 (not a prediction). As I just said, I am not selling my gold because I expect much higher prices in future. But, near term, both T-bonds and gold appear vulnerable to a more serious correction. - in Beacon Equity 

Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

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