Gold’s increase over 2% in the last week has the sheep crying bubble! Marc Faber, of the Gloom Boom & Doom report & regular CNBC contributor, earlier today told CNBC, If it were a bubble a lot of people would have gold. The whole world would be trading gold 24 hours a day. he went on further to say, But I don’t think it’s really a bubble. I think gold is maybe cheaper today than it was in 1999, when it was $252. (When adjusted for inflation & Dollar devaluation)
According to Marc, gold is under-owned by individuals & investors. He told CNBC in reference to a resent investors conference, I asked the investment professionals in attendance if any had more than 5 percent of their personal assets in gold. No one raised a hand. This echoed a recent sentiment of Ben Davies, Director & CEO of Hinde Capital, when he said, 0.7 percent of global assets invested in gold, the precious metal remains under-owned.
Mr. Faber also stated on his blog: Continue to accumulate gold. The best way is to dollar cost average every month. Gold may decline in the short-term, but the long term trend is up. Marc went on further to say, If the US ever needed to back the dollar with gold, it would take a price of $7500 per ounce of gold to accomplish this. Thus, gold remains an attractive asset. This in no way is a promise gold will climb to those lofty heights but it is a well taken point.
We still believe gold is cheap, we also believe that accumulation is the path all investors should be on to fulfill their commitments in a Tangible Asset Portfolio. A TAP is diversification & insurance supplementing all other investments you may hold. Take Faber’s advice, Continue to accumulate gold.
Marc Faber Blog: Gold Is Still Under Owned By Individuals And Institutional Investors