Gold May `Easily' Rise to $1,000, Marc Faber Says
Gold may ``easily'' rise to a record $1,000 an ounce next year as the
dollar weakens and Asian central banks diversify their reserves, said Marc
Faber, who advised investors to acquire the metal at the start of a six-year
rally.
By Saijel Kishan and Danielle Rossingh
15 November 2007
A ``continued'' weakening of the U.S. currency may help gold to climb above
its all-time high of $850 traded in January 1980, said Faber, managing
director of Marc Faber Ltd. and publisher of the Gloom, Boom & Doom Report.
``That's baked in the cake in my opinion,'' he said today in an interview.
``Gold is still relatively cheap. It hasn't risen as much as nickel, or
oil.''
The metal has climbed 18 percent in more than two months as the dollar slid
to a record low against the euro amid concerns of the economic impact of
U.S. subprime-mortgage defaults.
Gold for immediate delivery in London dropped $19.87, or 2.5 percent, to
$792.08 an ounce as of 5:21 p.m. local time.
It has declined 6.4 percent since trading at a 27-year high of $845.84 on
Nov. 11. The metal was ``overbought'' at that point and may still fall to
$750 in the next three to six months, Faber said.
``I don't know of any market that goes up in a straight line,'' he said. ``A
continued correction from here wouldn't surprise me; it's a correction, a
setback, in an ongoing bull market.''
Demand Gains
Faber's 2008 forecast echoes that of London-based research company GFMS Ltd.
Gold's rally may extend to $1,000 because of ``very strong investor
interest,'' GFMS Executive Chairman Philip Klapwijk said on Nov. 2.
UBS AG, Europe's biggest bank by assets, lowered its one- month estimate for
gold on Nov. 13 to $750 an ounce, a week after raising it to $850, saying
bullion's rally was overdone.
Gold demand rose 19 percent in the third quarter, led by a sevenfold
increase in investment in exchange-traded funds backed by bullion, the
producer-funded World Gold Council said yesterday. Demand increased to 947
metric tons from 796 tons a year earlier, according to the London-based
industry group.
Purchases of so-called ETFs and similar products rose to 138 tons from 19
tons as investors sought a haven from turmoil in the financial markets.
Bloomberg