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Marc Faber aka "Dr. Doom" Urges Investors to Go for Gold

Marc Faber aka "Dr. Doom" Urges Investors to Go for Gold

Release Date:  Friday, August 25, 2017

Gold and silver traded in a narrow range this week as investors waited for US Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi to speak Friday at the Jackson Hole Economic Policy Symposium. The meeting occurs "against a backdrop of modestly improving global growth and lower unemployment, while inflation has failed to rise as expected." (“Fed’s George and Kaplan Stake Out Inflation Debate at Jackson Hole.” Bloomberg 8.24.17)

"Gold prices drifted lower...pressured by a firmer dollar as investors awaited cues on further interest rate hikes from central bankers meeting in Jackson Hole this week...

"Losses were limited, however, after a threat by U.S. President Donald Trump shut down the government unless he got funding for a border wall with Mexico" (“Gold eases on Firmer US Dollar Before Jackson Hole Meeting.” CNBC 8.23.17)

Precious metals have held their ground as traders await further information regarding both monetary and legislative policy issues.  

Gold ended the week up $6.50, closing at $1291.80. Silver prices closed at $17.15, up $0.11.

Marc Faber AKA “Dr. Doom” Urges Investors To Go For Gold
Marc Faber, aka “Dr. Doom”, spoke with the Lombardi Letter urging investors to turn to gold.

“Marc Faber delivers clear and unequivocal warnings. He urges Americans in particular to own physical gold rather than gold certificates or related banking instruments. Yes, Faber wants you to buy actual gold ingots or jewelry that you can touch and personally put in your own safe. Why Americans specifically? Because, Trump is putting America on a collision course with many powers. Most have no way of inflicting heavy damage upon the United States …

“But a country like North Korea or Iran—and of course China or Russia—could deliver a cyber attack that cripples key infrastructure like the power supply, banks, or the Internet. If the lights go out, if millions of people can’t get online to check if their investment and banking accounts are still OK—Bitcoin and other blockchain variants included—nothing can beat an actual hard asset like gold. Rather than expose their investments to all manners of risk, from market fluctuations to cyber attacks, it’s best for investors to hold actual value. Gold clearly fits the bill because it’s an irreplaceable means of exchange …

“Faber himself owns physical gold. After diversifying his money investments into bonds, shares, and real estate until the 1980s, he realized in the 1990s that it would be better to own valuable assets that have ‘meaning’ outside the purview of the banking system and are not connected with financial investments.
As most central banks in the leading economies are keeping interest rates low, gold is an insurance policy against the overall rising cost of living. The global economy has been recovering slowly, remaining fragile. Meanwhile, rising levels of unsecured debt—subprime mortgages in the mid-2000s, and subprime car loans and mounting student debt now—are a constant reminder that financial collapse is behind the corner…

“Thus, it’s best to diversify your investment strategy, which has room for physical gold. That way, in case of a financial crash—and the chances of one are increasing every day—instead of losing all of your savings, you might lose only a part of it …

“Faber prefers physical gold. Gold or gold coins, after all, can be exchanged for goods and services even when the power is out due to a cyberattack and your bank card fails. Sure, cash also works in that situation. But, cash doesn’t appreciate unless it’s held in a bank. Gold doesn’t even need a safe to appreciate. It can do so in the comfort of your pocket. (“Marc Faber aka “Dr. Doom” Urges Investors to Go for Gold.” Lombardi Letter 8.24.17)

Gold's Rally Against Oil Is Just Beginning - Bloomberg
Precious metal rallies amid tension to near $1,300 level while slump in oil indicates start of a three-year gold rally.

“Even as some analysts decry that gold is looking expensive, the rally may be just getting going …

“In the midst of a tumultuous month in U.S. politics and global security, traders have pushed gold futures to near a nine-month high. But if the history of gold’s relationship with oil is any guide, that surge may last longer than the flare-up in geopolitical tension …

“The precious metal has rallied 11 percent in 2017 to trade at $1,294.40, compared to a 10 percent slump in crude. That divergence in price may still be going, meaning gold should continue to outperform oil before the 34-month cycle ends, according to a study of past trading patterns for the two assets …

“”Gold has rallied during the recent market setback and is now testing its key resistance level of $1,300,” Matt Maley, an equity strategist at Miller Tabak & Co., wrote in a note to clients. “That is the level that stopped rallies in both April and June, so if it can finally break above the level in any significant way, it’s going to be very positive for the yellow metal.’ …

“Whether driven by technical factors or the threat of derailed U.S. economic growth, money mangers are flocking to gold. Net-bullish bets on the metal are the highest since October, according to Commodity Futures Trading Commission data …” (“Gold’s Rally Against Oils Just Beginning.” Bloomberg 8.21.17)

Ignore Jackson Hole, Focus On This Instead When It Comes To Gold – CEO
Jackson Hole Economic Policy Symposium took place this week and while gold bulls try to hang onto recent gains, Frank Holmes, U.S. Global Investors CEO, is looking at the falling dollar and how it is good for gold.

“Gold bulls are trying to hang onto recent gains as markets await this year's Jackson Hole Economic Policy Symposium, taking place Thursday through Saturday. All eyes are on the big central bank meeting as investors look for clues on future monetary policy moves by the world's major central banks. However, one veteran gold investor says he's focusing on something else. U.S. Global Investors CEO Frank Holmes told Kitco News he's looking at the U.S. dollar. 'The falling dollar is truly helping the industrial sector in America, it's helping exports,' he said. 'More importantly, the falling dollar is good for all metals, especially gold.'…” (“Ignore Jackson Hole, Focus on This Instead When It Comes To Gold – CEO.” TheStreet 8.24.17)