Gold Moves Higher as Marc Faber Warns of 87-Style Stock Market Crash

Marc Faber is warning that a large stock market crash could be coming. How will gold perform in such an environment? In the past five days that the S&P 500 is down 3%, gold is up 3%. Year to date gold is up 9%, the GDX mining stock index is up 16% and the S&P 500 is down 0.8%. Meanwhile, the USD index has dropped below 80 for the first time in over a year.

“I think it’s very likely that we’re seeing, in the next 12 months, an ’87-type of crash,” warns a somewhat excited sounding Marc Faber, adding that he thinks “it will be worse.”

The pain is just getting started as Faber notes that “the market is slowly waking up to the fact that the Federal Reserve is a clueless organization.” Internet and Biotech sectors (growth stocks) are “highly vulnerable because they’re in cuckoo land in terms of valuations,” and fully expects the selling to spread as The Fed “have no idea what they’re doing. And so the confidence level of investors is diminishing,” and that means we will see a major decline.

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