Investor sentiment is certainly with gold for the moment. Every dip so far in the gold price has found strong support, suggesting that the heavy hitters are anticipating further increases in the price of the yellow metal.
Investment adviser and fund manager Marc Faber, publisher of the Gloom, Boom & Doom report, believes gold will outperform U.S. stocks as investors turn to the bullion on further government stimulus spending.
In an interview about the global economy Faber said the support level for the precious metal will now be at $1,000, which was gold’s resistance level previously…”I don’t think that you’ll see gold below $1,000 per ounce probably ever again”, Faber said. “So I’m quite positive. Maybe, gold at this level is a better buy than it was at $300 per ounce in 2001.”
The outlook for gold sparked a debate between Nouriel Roubini and Jim Rogers earlier this month. Rogers argued Roubini is wrong about the threat of bubbles in gold and EMs stocks. Roubini said a forecast by the investor that gold will double form current levels is “utter nonsense.” Predicting the short term direction of this trade at this point would be only a guess. Having said that, the supply of precious metals remains very limited as demand increases.
