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Marc Faber Says “Gold Is Oversold Near Term”

GoldCore's picture




 

Gold inched up on Tuesday ahead of Federal Reserve Chairman Ben Bernanke's Congressional testimony today and Wednesday which should provide the market with information as to whether the US central bank will flood the market with more US paper.

Recent soft data from the US such as weak retail sales that fell in June for a 3rd month in a row, shows further signs that US economic growth is sluggish, at best.

The market is expecting QE3 in some form to be announced and gold is finding support from inflation hedging buying and a pickup in safe haven demand – particularly in Europe.

Marc Faber has again warned that the U.S. government-bond market is overbought, the U.S. dollar is overbought and gold is oversold near term.”

Faber is “very negative about the outlook longer term” according to Paul Farrell writing in Marketwatch (see Commentary) who writes an interesting article about Faber’s recent interview on CNBC.

Farrell, like Faber, has been accurate in warning of the significant risks facing savers and investors in recent years.

Faber warned that “massive wealth destruction” is coming and that the ‘Super-Rich’ “may lose up to 50% of their total wealth.”

As Farrell astutely points out “both Wall Street and Main Street investors invariable don’t wake up … till it’s too late.”


Cross Currency Table – (Bloomberg)

Farrell agrees with Faber that Bernanke’s money printing will lead to a crash:

Final warning: Remember Dr. Doom’s Rule One: “Invest where you’ll lose the least amount of money!” Why? Because “massive wealth destruction is coming.” A time when “the rich may lose up to 50% of their total wealth.” With Bernanke the trigger.

NEWSWIRE
(Thomson Reuters Global Gold Forum) 
Jim Steel at HSBC says yesterday's soft US retail sales data will likely have increased speculation for another round of QE. "The slowdown in consumer spending reinforces the overall impression that economic activity has decelerated over the last few months following a relatively strong start to the year. Furthermore, the level of sales was revised down for April, to a decline of 0.5%, from an initial decline of 0.2%, taking the overall level of spending down for the entire quarter," he said.

"The data will probably lead to downward revisions in estimates of GDP growth for Q2. This may contribute to greater pressure on the Federal Reserve to provide additional monetary accommodation," he adds.

(Thomson Reuters Global Gold Forum) 
On the charts, Barclays Capital, whcih has a neutral stance on gold, flags up near-term resistance at $1,600/oz, and again at $1,640/oz. ScotiaMocatta notes downtrend resistance at $1,614.

(Bloomberg) -- South American Silver to Focus on Chile as Bolivia Seizes Mine
South American Silver Corp. will focus on developing a copper deposit in Chile as Bolivia takes steps to strip the company of a silver mining concession valued in the billions, Chief Executive Officer Greg Johnson said.

The company is seeking talks with Bolivia’s government after Vice President Alvaro Garcia Linera announced last week that the Andean country was “entitled” to recover control of the Malku Khota concession, Johnson said.

South American Silver may not lose its investment in the silver mine, Johnson said. The Vancouver-based company is studying options including arbitration to seek compensation. It also has other assets in the region.

“South American Silver has invested tens of millions of dollars into the project directly, but the value of this asset is that future cash flow, which is worth billions,” Johnson said in a July 13 interview. “We believe the story’s not over.”

The company has $38 million in cash and will continue to develop its Escalones project in Chile, which has 4 billion pounds of copper and 600,000 ounces of gold in resources, Johnson said.

Bolivia’s government on July 10 reached an agreement with local communities to revoke South American Silver’s exploration license after protests left two dead and company officials were taken hostage. The government will compensate the company for the silver and indium deposit located in the southwestern Andes, Garcia Linera said.

South American Silver’s shares plummeted 55 percent since July 6 after protests at the concession began. President Evo Morales said July 8 he was considering seizing Malku Khota. Since taking office in 2006, Morales has nationalized gas wells held by Repsol YPF SA and Total SA, and last month took over a Glencore International Plc tin and zinc mine.

(Bloomberg) -- IShares Silver Trust Holdings Unchanged at 9,697 Metric Tons
Silver holdings in the IShares Silver Trust, the biggest exchange-traded fund backed by silver, were unchanged at 9,696.71 metric tons as of July 16, according to figures on the company’s website.

================================================================================

                   July 16    July 13    July 12    July 11    July 10

                      2012       2012       2012       2012       2012

================================================================================

Million Ounces     311.757    311.757    312.823    312.823    312.823

 Daily change            0 -1,066,648          0          0          0

--------------------------------------------------------------------------------

Metric tons       9,696.71   9,696.71   9,729.89   9,729.89   9,729.89

 Daily change         0.00     -33.18       0.00       0.00       0.00

================================================================================

(Bloomberg) -- Zimbabwe Indigenization Isn’t Nationalization, Official Says
Zimbabwe’s indigenization laws that aim to boost black ownership in the economy do not equate to nationalization, mines ministry Permanent Secretary Prince Mupazviriho said.

“It’s not nationalization,” he said in a speech in Johannesburg today. “It’s not forced on anyone. You come up with your own partner. You come up with your own structure.”

The southern African nation last year introduced a law compelling foreign and white-owned companies to sell or cede 51 percent of their shares to black Zimbabweans or a state-owned indigenization fund. The law initially targeted only mining companies in the country and has now been extended to foreign- owned banks.

Zimbabwe has the world’s largest platinum deposits after neighboring South Africa. Gold, diamonds, ferrochrome, coal, copper and asbestos are some of the minerals mined there by companies such as Impala Platinum Holdings Ltd.’s Zimplats unit, Aquarius Platinum Ltd., Sinosteel Corp. and Metallon Corp Ltd.

For breaking news and commentary on financial markets and gold, follow us on Twitter.

NEWS
Gold inches up as investors await Bernanke testimony - Reuters

Gold Advances As U.S. Retail Data Increase Stimulus Speculation - Bloomberg

Gold flat as investors await Bernanke testimony - MarketWatch

Gold Beats Lafite As Wine Tracks China Stocks: Chart Of The Day - Bloomberg

 

COMMENTARY
Faber: Rich will lose 50% in massive wealth destruction - MarketWatch

Gold 'Divine' As Chinese Sell Wine - ZeroHedge

Things That Make You Go Hmmm - Such As QE3 Marking An S&P500... Top? – Zero Hedge

Summer Doldrums Over, Gold & Silver To Explode – King World News

 

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Wed, 07/18/2012 - 08:26 | 2627503 Widowmaker
Widowmaker's picture

Widowmaker says Faber is overbought, short and long term.

Wed, 07/18/2012 - 07:22 | 2627416 northerngirl
northerngirl's picture

Faber warned that “massive wealth destruction” is coming and that the ‘Super-Rich’ “may lose up to 50% of their total wealth.” 

That will never happen, the, "Super-Rich", will always be taken care of.  As for the rest of us the destruction has already happened.  We just have not felt the full impact of the pain.

Wed, 07/18/2012 - 08:23 | 2627499 ExhiledInMass
ExhiledInMass's picture

New here and not sure of protocol so go easy if this is a faux pas...

In re: to Faber's "putting your money where you'll lose the least..." why am i getting my ass kicked shorting VIX, china and banks?

Fri, 07/20/2012 - 06:04 | 2635116 MeelionDollerBogus
MeelionDollerBogus's picture

try long vxx long faz long spy long gld all at once, probably using options > 60 days.

Keep an eye on citi group (C) options too, may just move enough to be worth it. If it dips enough go long, goes a bit higher then you go short.

Wed, 07/18/2012 - 08:37 | 2627515 GMadScientist
GMadScientist's picture

Don't play a rigged game of dice, Sparky.

Stop enabling them.

Wed, 07/18/2012 - 06:02 | 2627328 Bastiat009
Bastiat009's picture

Gold is once following the euro down. I know it's not true, it's not possible but yet it's happening. I don't care what you think, what you want. 

Given US policies (wars, debt, fed interventions ...) I would assume that the US$ should go down but it's not happening because the euro is weakening and so is gold.

Faber's predictions are not always accurate. 

Fri, 07/20/2012 - 06:08 | 2635119 MeelionDollerBogus
MeelionDollerBogus's picture

no, gold is merely repeating its own price chart from an earlier time - 2006.

2011 dec 27 gold 01 | goldpricemodel | 277 week ROC visual confirmation

2012 06 18 277week roc 02 goldpricemodel 2011 Jan to 2012 Dec 28

easily seen for daily updates, http://scharts.co/KEir6R

 

Wed, 07/18/2012 - 08:40 | 2627524 GMadScientist
GMadScientist's picture

Right. Just like Meredith Whitney's prediction was not "accurate", for a given span of time, in a rigged bond market, until now.

Do not look directly at the Blythe.

Wed, 07/18/2012 - 04:33 | 2627265 silverdragon
silverdragon's picture

Physical Gold and Silver are a much better bet than pretty much anything else out there, especially as idiot politicians print like there is no tomorrow. Silver must have a greater upside as it has 10,000 industrial uses and has been money throughout history.

Wed, 07/18/2012 - 01:48 | 2627121 Nachdenken
Nachdenken's picture

"The super rich will lose 50%" of their wealth.  That still leaves a lot.  It is the rest for whom a 50% cut goes to the bone.  Even through the gold and silver shield.

Wed, 07/18/2012 - 00:15 | 2626996 Bansters-in-my-...
Bansters-in-my- feces's picture

ESF........

NO YOUR ENEMY IF YOU ARE A GOLDBUG.....

This U.S.A.treasury tool smacks gold down EVERYDAY.

Ps.

Fuck you Little Weasel timmy g

Wed, 07/18/2012 - 00:43 | 2627049 AldousHuxley
AldousHuxley's picture

http://www.youtube.com/watch?v=OA2x1krgoog

marc faber CNBC May 2012

watch starting 5:50 marker

 

"CER TEN TEE"

Tue, 07/17/2012 - 20:57 | 2626531 Yohimbo
Yohimbo's picture

you can eat silver

Wed, 07/18/2012 - 08:43 | 2627526 GMadScientist
GMadScientist's picture

Please try eating nothing but for a month.

Dead smurfs aren't much fun.

Wed, 07/18/2012 - 07:41 | 2627447 Count de Money
Count de Money's picture

But it will turn your skin blue.

Wed, 07/18/2012 - 00:51 | 2627059 GOLDTEETHSILVER...
GOLDTEETHSILVERFILLINGS's picture

I say follow the yellow brick road...

Tue, 07/17/2012 - 23:30 | 2626865 bilbert
bilbert's picture

+1

Yes, you can, but since it costs $5 per oz to bring Silver out of the earth, Big Mac's are a MUCH better value!

/s

Tue, 07/17/2012 - 15:44 | 2625510 paint it red ca...
paint it red call it hell's picture

"(Bloomberg) -- South American Silver to Focus on Chile as Bolivia Seizes Mine"

 

reading the above reminded me that the US has natinoalized AIG GM fannie, and freddie.

anybody find it amuzing the central and south american banana republics nationalize corporate profit centers and the north american banana republic nationalizes corporate liabilities?

Tue, 07/17/2012 - 14:22 | 2625085 oldmanagain
oldmanagain's picture

Ron Paul is stealing your contributions, but is an idol.  Marc is a bear, has been, will be, and at times will look analytical.

Wed, 07/18/2012 - 05:28 | 2627309 ebear
ebear's picture

Just another talking head.  If it's on TV, it's already been priced.

Tue, 07/17/2012 - 14:26 | 2625100 Broomer
Broomer's picture

I gave a green arrow to you.

Ron Paul this, Ron Paul that, he's Jesus incarnate.

No, he is a politician, he won't solve anything. Here in Brazil we had our share of saviors and the country is going down the drain, as always.

 

Tue, 07/17/2012 - 19:51 | 2626375 johny2
johny2's picture

You are right that politicians will not change anything, as they are just puppets. However, Brazil is not really going down the drain, as far as I can see. In fact, I see bricklayers that make $100 per day, which is not so bad really.

Tue, 07/17/2012 - 13:56 | 2624998 doc_in_the_house
doc_in_the_house's picture

marc faber = ANOTHER shoe shine boy

(do opposite of what he says) IF he is chasing.

on 4-1-12 when nikkei @ 10k+ he said "it would outperform" did he mean down?? LOL !!

http://www.marcfaberchannel.blogspot.com/2012/04/faber-japanese-market-may-outperform.html

 

when gold @ 1850...AFTER TANKING from 1900, he said: "don't panic" = me short !! LOL !!

Tue, 07/17/2012 - 14:00 | 2625016 Ghordius
Ghordius's picture

ehmm... I know this is unpopular, but Faber's advice is tailored for long-term, no-leverage investors, "old-money style"

Tue, 07/17/2012 - 14:12 | 2625058 doc_in_the_house
doc_in_the_house's picture

since his rec to "NOT PANIC"

when gold was @ 1850 after dropping from 1900...anyone who bought gold and/or HELD is DOWN -17% (that's WITHOUT MARGIN)...just ask john paulson...LOL !!!!!!!!!!

anyone who bought nikkei @ 10k..is now down -13% (WITHOUT MARGIN)..he said buy nikkei @ 10k..now @ 8.7k...ROFLMAO !!!

and he calls himself "dr. doom" LOL !!!!!!!! will the real dr. doom please stand up = ME !!

i do have a margin account = for SHORTING....but don't use margin!! just wait for casino stocks to get excessively bullish = me short..........wait for excessive drops = me cover.

Fri, 07/20/2012 - 06:23 | 2635136 MeelionDollerBogus
MeelionDollerBogus's picture

Anyone determined to only hold for that time period should be trading in paper like options, especially to hedge - buy gold at 1900 and buy a GLD put to go with it with say, 100 days time. You can do that without any margin.

Otherwise just watch and wait. People said the same of me when I bought gold at 1275 and it kept going down for nearly a year. I bought all the way into that price decline.

You see me crying? Boo hoo.

Tue, 07/17/2012 - 15:06 | 2625272 doc_in_the_house
doc_in_the_house's picture

thumbing me down...LOL !!!

is REALLY going to change the fact that gold has peaked @ $1900 and is now @ $1580...and headed to sub $300...(not straight down)...LOL !!!!!

same thing with casino stocks...spx to 300.

Fri, 07/20/2012 - 06:32 | 2635140 MeelionDollerBogus
MeelionDollerBogus's picture

Without math to back up your claims of price targets you get a thumbs down.

Show the math and you can get a thumbs up.

From what I can see any time I feel like it I can change the red arrow to a green arrow.

Gold never returned to 35, its next multi-decade low was 260. Gold won't return to 300 either - I thought the next multi-decade low would be 1300 but it looks like we're in it, so for the next few decades we'll likely see 2500, 5000, 8000, maybe a drop down to 2500 or 3000 again, highs probably at 10,000 per ounce.

This is what I got for math & charts:

2012 Apr 10 gold price performance 10 years | Flickr - goldpricemodel

gold vs DXY 2012 10 years history - goldpricemodel

2012 apr 17 gold ROC trends | 52week ROC gold to 2400/oz

and this http://flic.kr/p/cutWa7 makes it obvious how much better gold is doing than the stock market, but worst of all ...

right from the Fed itself, http://research.stlouisfed.org/fred2/series/M2/ , this chart shows the M2 money supply. Until this drops about 5 trillion dollars these sub-300 values for SPX and gold you call for are nonsense and impossible. Take away the punch bowl and by all means, we'll see it.

Are you proposing all this money will be taken away? If so, can you prove your claim?

Wed, 07/18/2012 - 08:47 | 2627532 GMadScientist
GMadScientist's picture

You sound like someone jazzed to have finally figured out how to "work the system" at their county jail.

 

Tue, 07/17/2012 - 21:26 | 2626617 jomama
jomama's picture

if it really is going to 300 FRNs/TO, i am going to be very rich.

Tue, 07/17/2012 - 20:33 | 2626476 BeetleBailey
BeetleBailey's picture

Yeah...thumbing you down dickweed. Know why? People who make wild-ass fucked up predictions are as worhtless as a fart in a fan store.

Go blow with your 300 buck prediction. You have no idea where the price of gold is going any more than I do.

Have a smoke. Listen to a joke. Take a toke. Jack off. Rid the world of some of your potential children....spare us.

Tue, 07/17/2012 - 19:44 | 2626370 foxmuldar
foxmuldar's picture

Sub $300? You just showed why you keep getting voted down. 

Tue, 07/17/2012 - 15:03 | 2625222 jimmyjames
jimmyjames's picture

since his rec to "NOT PANIC"

when gold was @ 1850 after dropping from 1900...anyone who bought gold and/or HELD is DOWN -17% (that's WITHOUT MARGIN)...just ask john paulson...LOL !!!!!!!!!!

*************

Typical short sighted asshole making a fool of himself-

I don't agree with Faber a lot-but in your rush to make yourself look like you know something-you are forgetting that Faber was on the buy side at sub $300-

Where does that put his investment today?

Those who bought at 1900 or even 1700 are underwater and lost if they sold-but that is 1 year of an 11 year bull market-so-in the same vain-you look like as much of an idiot as you slam Faber for being-

Tue, 07/17/2012 - 14:33 | 2625125 Ghordius
Ghordius's picture

well, yes, I agree that his Japan call was a tad on the wrong side, though I have to admit that I think nobody could have foreseen Fukushima.

Faber's basic advice is 25% gold, 25% stocks with a focus on Asia, 25% bonds in select countries and I forgot the rest. Ah, and the caveat that he expects 50% losses in purchasing power!

All I wanted to say is that his advice is meant to be useful for sizable portfolios and I sometimes think it's dangerous advice for the small and fast...

nevertheless I like this Swiss SOB

Tue, 07/17/2012 - 15:03 | 2625257 doc_in_the_house
doc_in_the_house's picture

his call to BUY nikkei @ 10k

was on april 2nd 2012...NOT march 2011....4-2-12 = AFTER FUKUSHIMA !!

marc faber = ANOTHER shoe shine boy.

i don't remember him saying to buy gold @ $300...but i do remember some guy who drank lots of carrot juice to prove his belief in gold when @ $300...i did buy some @ $290 before the carrott man showed up....dumped it ALL @ $800...yes i know, a "TAD" early....but no worries i'll  be able to pick it up @ $300....AGAIN.....mark my words.

Wed, 07/18/2012 - 08:09 | 2627483 Crash N. Burn
Crash N. Burn's picture

"i did buy some @ $290 before the carrott man showed up....dumped it ALL @ $800"

 

 You cashed out  of the ponzi, only to sell your real money for more fiat toilet paper?

 

"yes i know, a "TAD" early" - This may help:


Mike Maloney – GoldSilver.com – when to sell
Tue, 07/17/2012 - 19:44 | 2626369 johny2
johny2's picture

one day, not too far away from now, the money in your trading account will stop being worth enough to print it on the paper, and the gold will be $300 per gram. Mark my words as a friendly warning.

Tue, 07/17/2012 - 15:23 | 2625367 jimmyjames
jimmyjames's picture

i don't remember him saying to buy gold @ $300

************

I'll refresh your selective memory for you-

************

Jan. 8 (Bloomberg) -- Marc Faber, who predicted the U.S. stock market crash in 1987, said global assets are poised for a ``severe correction'' and it's time to sell.

Faber, founder and managing director of Hong Kong-based Marc Faber Ltd., advised investors to buy gold in 2001, which has since more than doubled. His company manages about $300 million in assets.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=afYGFBA.L8PQ

Tue, 07/17/2012 - 21:11 | 2626576 doc_in_the_house
doc_in_the_house's picture

that link is 2007...NOT 2001 !!!

show me a 2001 link where he says to buy gold @ $300 !!!!

the carrot man (golden face)..i saw him on forbes magazine when gold was @ 290 OR $320...anyways i bought @ $300 !!!

Tue, 07/17/2012 - 21:28 | 2626621 jomama
Tue, 07/17/2012 - 21:27 | 2626618 jimmyjames
jimmyjames's picture

Read the link clueless asshole-it doesn't matter what date it was written-anyone that has been around knows Faber is and has been a gold bull since the start-

Something tells me you haven't been around very long and i suspect your buy at 300 is pure bullshit-

Wed, 07/18/2012 - 04:12 | 2627241 jeff montanye
jeff montanye's picture

and a sale at 800, expecting to get back in at 300?  what is that?  he thinks being down 10 or 15 percent is worse than leaving a double (more really) on the table?  don't lose your position in a bull market -- reminiscences of a stock operator http://en.wikipedia.org/wiki/Reminiscences_of_a_Stock_Operator

Tue, 07/17/2012 - 13:35 | 2624914 Northeaster
Northeaster's picture

If I understand this correctly:

http://www.cmegroup.com/tools-information/lookups/advisories/clearing/fi...

There should be a massive sell off due to higher margins. Theoretically, August 6th should be a great day to buy gold.

Any professionals that trade in this market, please chime in.

Tue, 07/17/2012 - 21:43 | 2626654 engineertheeconomy
engineertheeconomy's picture

At this price, any day is a great day to buy

sell when it hits $10,000/oz.

 

Tue, 07/17/2012 - 13:24 | 2624863 Bartanist
Bartanist's picture

Faber and Biederman should get a room.

Not sure of the relevence, but it seemed like the inappropriate thing to post at the time.

Wed, 07/18/2012 - 02:03 | 2627135 veyron
veyron's picture

Biderman is a permaclown

Tue, 07/17/2012 - 13:18 | 2624838 Nothing To See Here
Nothing To See Here's picture

What this country needs is Ron Paul. What this country wants is kool-aid in the form of Romney, Obama and/or American Idol.

Fri, 07/20/2012 - 06:40 | 2635147 MeelionDollerBogus
MeelionDollerBogus's picture

Gary Johnson seems pretty sensible too and no one needs to wait for a nomination race far as I can see.

Tue, 07/17/2012 - 14:30 | 2625111 CCanuck
CCanuck's picture

Ron Paul = Castor oil

Do NOT follow this link or you will be banned from the site!