Gold Will Fall to $800, Its True??
Posted November 13, 2009on:
Gold prices will dip in the short term, falling to $800 an ounce from current values around $1,100, says investment guru Marc Faber, author of the Gloom, Boom & Doom Report.
The U.S. economy will require further stimulus packages, which will weaken the dollar, thus making government debt also a bad investment choice in the short term, Faber says.
Commodities such as oil and gold have been rallying on a weak dollar, but that will change as prices must correct, he says.
Gold has soared as high a $1,111 mark, but Faber says those prices will slip while the dollar is due for a rebound, at least in the short term.
“In the case of gold a decline below $1,000 would likely lead to further more meaningful weakness, possibly down to between $800 and $900,” Faber wrote in his column.
The U.S. economy is emerging from the recession, with gross domestic product gaining 3.5 percent in the third quarter on an annualized basis.
Faber has said lagging unemployment rates and low personal income rates will slow economic recovery despite nominally high official growth rates.
Nevertheless, gold prices are staying high for now, as a weak greenback pushes investors away from currency markets and into precious metals.
“Short-term traders are looking at gold as an inverse play on the dollar,” says Nicholas Brooks, head of research and investment strategy at ETF Securities in London, according to the Associated Press.
By: Forrest Jones © 2009 Newsmax.