Tuesday, September 27, 2011

Gold could go down

In a CNBC interview Monday, "Gloom, Boom, and Doom Report" author and contrarian investor Marc Faber thinks gold could bottom at $1,500 per ounce, but sees the metal dropping to as low as $1,000 to $1,200 per ounce should $1,500 not hold. Faber said he wouldn't be surprised to see a 40 percent drop in gold.

While Faber said short-term market action might push gold higher, he's still bearish on the long-term potential for gold and equities. He said a longer slow down will follow the current recovery.

Faber says markets slumping can be traced to a slowdown in China. "You have a capital goods level where capital spending increases dramatically and companies keep spending to a high level, but because of the acceleration, it can lead to recession simply by the economy growing at a steady rate, and I think we are at this point in China," Faber said.

Marc Faber is a famous contrarian investor and the publisher of the Gloom Boom & Doom Report newsletter.