(AXcess News) New York – Will gold reach its lofty highs of $2000 this year or will it plummet to as low as $1500? That’s what AXcess News readers would like to know, so let’s lay out the case for each.
Marc Faber believes that gold prices will see a correction downward of $50 to as much as $150 before seeing any gains and even though “Dr. Doom, ” as he’s fondly referred to by CNBC, believes prices are going to drop he’s still hanging on to his position in gold.
“I don’t think gold will go up right away, and we maybe have a correction of 10 percent or so on the downside, ” the publisher of The Gloom Boom & Doom Report said in a “Squawk Box” interview. “But I see that governments will print money … so I want to have gold as an insurance policy.”
While Faber shows concern over the economic direction of the Obama administration in pointing to the massive debt the U.S. government is incurring, gold guru Peter Schiff agrees that investors should be wary, but Schiff also believes that the Treasury Department’s money-printing fervor will lead to inflation and through it, drive investors into precious metals… namely, gold.
“It cannot, or should not, be denied that Washington’s latest fig leaf will have a major impact on the markets. The New Year’s ‘relief rally’ is understandable given the clear implications that the government will simply print its way out of trouble for as long as it can, ” said Schiff.
Schiff went on to say, “But it is important to look at the nature of the rally. Most significantly we would bring investors’ attention to the increase in gold and oil and other assets that are expected to outperform in an inflationary economy.”
So there you have it, both outlooks given, but with a strange duality in the authors concern over economic direction of the Obama administration and its effect on the U.S. economy. Both seem to believe inflation will drive the price of gold higher. The real question is … when.