Brexit is a sideshow to the world economy, and gold remains an important
asset in any portfolio, says Marc Faber, editor of the Gloom, Doom and
Boom Report.
Brexit is a sideshow to the world economy, which began weakening the end
of 2014, according to Marc Faber, editor of Gloom, Doom and Boom Report.
In an interview with CNBC on June 28, Faber cited as evidence the strong
performance of Treasury bonds, saying "over the last 12 months U.S.
long-term Treasuries are up 20%, and they are up 15% year to date."
Faber believes that the British vote to leave the EU could lead to more
quantitative easing. "Brexit will give a perfect excuse to the Federal
Reserve not to increase interest rates and be most likely to launch
QE4," he said, adding that such a movement could give a boost to stock
markets.
But long term, Faber believes all investors should hold some gold, calling
it a "no brainer" in an environment of money printing.
"Is gold near term overbought? Yes, it is," Faber said.
"But longer term, I think every investor should have some cash, which he
would keep in yen or in dollars or in euros, and should have some of this
cash in gold."
He chided analysts for advising that "gold is rich at $1,000"
and for predicting that gold would drop to $700, leading many to miss gold's
recent run up.
Gold reached a two-year high of $1,358 on June 24 after the Brexit vote
and on June 30 is trading at $1,321.
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