Marc Faber: "QE4 is coming, make sure you have gold"

There is even more reason to buy gold now that the British people have voted in favour of leaving the European Union, claims Marc Faber. As a result of the turmoil in the financial markets, according to the investment guru, there is a greater chance of new stimulus measures by central banks, which could result in a fall in the value of currencies and a rise in the price of gold.

Faber, in an interview with Bloomberg that he is taking into account a fourth round of monetary easing by the US central bank. In fact, there are currently more analysts counting on a rate cut than a rate hike by the Federal Reserve, despite the central bank's promise to raise rates incrementally this year. Due to the great turmoil after the 'Brexit', few investors are counting on an interest rate hike before the end of this year.

Marc Faber continues to buy gold

Investment guru Marc Faber has been positive about precious metals for years and still says every month buy gold. He is also positive about gold mining stocks, although he is reluctant to invest in them now. Many of these stocks have doubled in price since the beginning of this year. A correction must first take place before the shares of the gold miners will start a new rise.

The gold price shot up by 10% as a result of Brexit and at the time of writing is more than twenty percent higher than at the beginning of this year. In British pounds, the price of the precious metal has even risen by 37% since the beginning of this year. Uncertainty about the consequences of a 'Brexit' and the expectation that central banks will stick to an accommodative monetary policy for a long time to come is pushing up the gold price. Even banks that were negative on gold at the beginning of this year - such as JP Morgan, Deutsche Bank, Goldman Sachs and ABN Amro - now foresee an uptrend for the precious metal.

"Central banks can use Brexit as an excuse to print more money. QE4 in the United States is coming, while the purchasing power of currencies will continue to decline. Under these circumstances, you want to own gold."

Weak growth

Marc Faber notes that the global economy has barely grown for a year and a half and that the growth of the US economy has also weakened since the end of 2014. He says the following about this:

"Growth is slowing everywhere, and I'll tell you why. In essence, the growth we've had since 2009 has been artificial, driven by money printing and by central banks driving up the prices of financial assets. If stocks, bonds and real estate and the like rise in price, it creates a trickle down effect."

Faber also has a strong opinion about Brexit...

"And Brexit is not about an end to globalization. It's about people who rebel against the arrogant elite in the financial centers. If you look at the UK, you can see that the financial sector is doing well and financial assets are doing well. But for the common man, things are not going so well at all.

It's the same in Hong Kong, the people who have the financial assets are doing well, but the common man is doing much less. The cost of living has gone up, look at the rents and such... There is a lot of dissatisfaction with this system and that is what the referendum was about. I believe it would be better if the arrogant bureaucracy in Brussels was stopped and reduced in size."

Gold sentiment positive

Many big names in the investment world expect the gold price to rise further. Well-known names such as George Soros, John Paulson, David Einhorn and Stanley Druckenmiller have previously taken a position in gold and gold mining stocks.

Still, not everyone is optimistic. For example, in a new crisis, Jim Rogers expects a flight to the dollar rather than to gold, and analysts at the Swiss bank Credit Suisse believe that the gold price will not rise further in the next three to six months.

Marc Faber: "QE4 is coming, make sure you have gold"