But no matter what segment Faber has an eye on, his focus always circles back to one asset: gold. The precious metal has long been an important part of his holdings, and he has not been shy about vocalizing his love for the commodity.
Faber’s Gold Strategy
As 2013 opened, Faber was quick to note that the threat of inflation around the world coupled with a weak dollar has him very worried about the future of the global economy. His solution? He buys gold every single month, waiting for a 20% price correction. Though gold took a hit at the end of 2012, Faber is waiting for a further drop to shake out all of the speculators and those with margin calls so he can make a more meaningful increase to his position.
Faber has also stated that he intends to hold the precious metal for as long as he lives. “I will never sell my gold in my life. As long as I have to look at people like Mr. Bernanke and Mr. Obama I will always buy gold each month.” Though Bernanke will likely end his time at the Fed in 2014 and Obama will exit the White House in 2016, Faber seems comfortably set in his ways. Unlike other experts, he is not concerned that 2013 will bring an end to gold’s 13 consecutive positive years, as he feels that there are too many issues around the world for gold not to go up [see alsoPlatinum Coins: A Trillion Dollar Blunder].
Faber joins a long list of those who have put a fair amount of trust in this precious asset, including prominent names like George Soros, John Paulson, Jacob Rothschild and Peter Schiff among others. The former three are all heavily invested in the SPDR Gold Trust (NYSEARCA:GLD) though Schiff does not share the same optimism for the fund. This will be a make-or-break year for this commodity, as markets flirt with pre-recession highs and investors slowly move into “risk on” purchasing. Faber’s bullishness on the metal will certainly be tested in the coming months, as it remains to be seen if the metal can find its footing after falling out of the graces of many towards the end of 2012.
Related: iShares Silver ETF (NYSEARCA:SLV), iShares Gold Trust (NYSEARCA:IAU).
CommodityHQ offers educational content, analysis, and commentary on global commodity markets. Whether you’re looking to speculate on a short-term jump in crude or establish a long-term allocation to natural resources, CommodityHQ has the information you need.