“We will not see less than the $1,000 level again,” Faber said at a conference in London, Bloomberg reported
Also bolstering gold prices will be the Beast of the East, according to Faber. “China’s demand for commodities [including gold] will go up and up and up,” Faber said, Bloomberg reported. Thursday. “Central banks are all the same. They are printers. Gold is maybe cheaper today than in 2001, given the interest rates. You have to own physical gold.”
The author shows skepticism about Gold and its bull market:
Maybe Faber is right and gold-floor $1,000 is here to stay — but it’s a pretty bold statement. At some point the Fed will have to raise rates. (Let’s hope so, anyway, if only because it would mean the economy is growing and unemployment is shrinking.)
Then there’s the problem that the weak dollar is traumatic for our trading partners, since a weak dollar makes it harder for them to sell us their stuff. Fed chairman Ben Bernanke apparently doesn’t get paid to worry about what governments elsewhere think, and so those governments have begun to take matters into their own hands. Thailand, South Korea, Russia and the Philippines have been sucking up dollars to stop its nauseating slide, The Wall Street Journal reported Thursday.
And if China gets into the act? The call on gold-floor $1,000 could look very foolish, indeed.
Interest rates will be behind Gold for a long time. You think Bernanke is going to raise rates to 10%? Raising rates a few times will not affect Gold. There is too much debt in the US for Bernanke to pull a Volcker.