Marc Faber Sees Gold as Cheap

Talking to the Daily Ticker, Marc Faber said, based upon statistics, gold should be trading from $6,000 an ounce to $10,000 an ounce. Faber says that's why he doesn't believe gold is in a bubble at this time.

Even so, he does see the strong possibility of gold continuing to be volatile as it continues to climb in price. So far in 2011 it's up by about 30 percent.

Faber particularly cited the continued debasement of fiat currencies as the major driver of gold prices, along with global demographics. He said gold should be "well supported" in light of those realities.

As far as his recommendations, Faber says investors should remain diversified, with 25 percent in stocks, 25 percent in real stocks, 25 percent in gold and silver and 25 percent in cash.

Gold miners today

Eldorado Gold (NYSE:EGO) was trading at $21.84, up $0.04,or 0.18 percent, as of 12:22 PM EDT. Yamana Gold (NYSE:AUY) was at $17.21, falling $0.18, or 1.04 percent. Novagold was trading at $9.39, down $0.12, or 1.26 percent. Goldcorp was at $55.96, gaining $0.12, or 0.21 percent. Barrick Gold was at $54.99, falling $0.19, or 0.34 percent. Newmont was trading at $65.66, level with Thursday's close.

NovaGold Resources (AMEX:NG) Starting to Make its Move?

NovaGold Resources (AMEX:NG), if for no other reason, has garnered some attention because of investment of major players like George Soros, John Paulson and Marc Faber. Faber also sits on the board of the company.

NovaGold recently started to make a momentum move, although they have pulled back with the price of gold, although they've rebounded nicely today.

They continue to be a long-term investment, even though they will make money in the short term from momentum alone because they are largely undervalued, and the long term for the same reason.

But much of the company is potential at this time, because their huge Donlin Creek project in Alaska will take time to bring online. Some measure that project alone as pricing the company at about $40 a share.

NovaGold is trading at $14.44, gaining $0.97, or 7.20 percent as of 12:25 PM EST.

Marc Faber Likes Ivanhoe (NYSE:IVN), Barrick (NYSE:ABx), Novagold (NYSE:NG), Gold Fields (NYSE: GFI), Newmont (NYSE:NEM)

Marc Faber, the contrarian investor and the real Dr. Doom of the marketplace, has been pushing the value of investing in gold for a number of years. He recently named the gold miners he likes at this time, which are Ivanhoe Mines (NYSE:IVN), Barrick Gold (NYSE:ABx), Novagold (NYSE:NG), Gold Fields (NYSE:GFI), Newmont Mining(NYSE:NEM), Gabriel Resources (TSE:GBU), Centamin Egypt (TSE:CEE) and Sprott Resource (TSE:SCP).

A little suspect is his Novagold pick, as he was recently named to the board of the company.

Barrick and Newmont are obvious as the large-cap miners. Ivanhoe is also among my favorites over the long term, although once their Oyu Tolgoi mine gets going, they will be more like Freeport-McMoran (NYSE:FCX) than primarily a gold miner, as the copper resources there are vast, although so are the gold resources.

Faber recently stated that he believes gold is still inexpensive, and investors should allocate resources to it on a monthly basis.

Gold Still Inexpensive Says Marc Faber

Speaking at a CLSA Investors’ Forum 2010 in Hong Kong recently, Marc Faber said he still sees gold prices as relatively inexpensive, even though record prices continue to be set.

Faber gave his reasoning as this, “Given all the unfunded liabilities and the money printing in the world and the size of the financial assets in the world, I don’t think we are in a bubble.”

He's definitely right. At this time these elements aren't close to being fully priced into the value of gold, and central banks and governments are drunk on spending and reckless in stimulus, as they're caught in their socialist schemes which can't be paid for.

Even though he still considers gold to be cheap, Faber does recommend a monthly investment rather than attempting to time the market or putting everything in at once.

He also suggests gold will go through some significant price swings and corrections while maintaining its upward climb. That means those with large, one-time investments could get slammed if their entry point is on the high end.

Bottom line is governments aren't going to quit attempting to pay for their socialist programs, and that guarantees quantitative easing and stimulus, along with the accompanying increase in gold prices.

NovaGold's (AMEX:NG) Donlin Creek Getting More Expensive?

Now that NovaGold (AMEX:NG) losses have mounted over the last quarter, they are getting more aggressive in pursuing capital to work on their Donlin Creek project, which is by far their most important mine. They are in a 50/50 partnership with mining giant Barrick Gold Corp. (NYSE:ABX) in the project.

Either the costs at the project are increasing, or NovaGold is pushing harder to get it going, as the proven gold reserves of 34 million ounces, valued at about $41 billion at today's gold prices, has them salivating over the prospect of getting gold production going.

Marc Faber recently joined the board of the gold miner, and financial giants like John Paulson and George Soros have invested millions into the company.

At this time all the appropriate studies are being conducted, which take time, and the gold production may not start until as late as 2017.

With NovaGold having to pay close to $2.2 billion in capital costs for Donlin, you can see why they need more capital to operate until production begins.

This is of course nothing new to the industry, but if costs do increase, NovaGold faces challenges over the long term. Having Faber on the board and a resume of Paulson and Soros investing about $175 million in them, they do have a solid foundation and argument to work from.

Now they will attempt to battle to keep their 50 percent stake while raising capital, as their giant partner could easily take up the slack if problems arise, which NovaGold wouldn't want to allow to happen.

Over the long term this is a sure thing, now NovaGold has to raise the needed and significant amount of capital to last long enough to cash in, without giving up anything else.

NovaGold (AMEX:NG) Places Marc Faber on Board

Marc Faber has been appointed to the board of NovaGold Resources (AMEX:NG) (TSE:NG), according to a company press release today, along with Igor Levental.

Faber is of course the publisher of the popular The Gloom, Boom & Doom Report, and ubiquitous in the financial media, who love to get his contrarian view on all things economic.

"Dr. Faber and Levental are among the brightest minds in the business and bring extensive experience and expertise to NovaGold. We are truly delighted that they have joined NovaGold's Board of Directors," said Rick Van Nieuwenhuyse, NovaGold's President and CEO in the release. "Their credentials and their extraordinary wealth of market and industry experience will be invaluable as NovaGold advances its portfolio of world-class projects along the value chain for shareholders."

NovaGold has struggled since May, dropping from just under $9 a share to Thursday's close of $6.28 a share, a loss of $0.13, or 2.03 percent.

Marc Faber, Jim Rogers Continue to Hold Gold

Confusion over the daily fluctuation of the markets based on little snippets and tidbits of news can drive even the most astute trader or speculator batty, but in the case of gold, investors and pundits like Marc Faber and Jim Rogers aren't confused at all, and they both say they have no intention of selling their gold, and are always on the lookout for dips so they can acquire more.

Without getting into too much detail, the reasons these guys continue to do this is there overall understanding of the macro-economic circumstances.

If you understand the macro-economic situation affecting any investment, and gold in particular, the daily ins and outs of the market are largely irrelevant, unless you're trying to make a quick killing, which hopefully you're not. Even the day traders can't do that great in attempting to time the market, and very few are that successful, even though there is always the glamor attached to being involved in it.

In general, macro-economics as it relates to gold, will deal with issues like national debt, inflation, paper currency and the practices of central banks; all of which the above are highly affected by.

For example, around the world now central banks refuse to implement austerity measures into their practices, as they're committed to bailing out whatever major problems occur in order to save the various economies or industries they deem in need of saving.

That means they'll have to print money and government debt will continue to rise to astronomical levels.

Another indicator is job creation in the private sector, which is just above zero in the United States, with the government being the almost sole creator of jobs, which means they're propping up the economy while creating nothing of value that has a chance to last.

This is why Faber and Jim Rogers continue to hold gold. The central banks and governments have become addicted to these practices even more than in the past, and it's not sustainable by any stretch of the imagination.

Consequently, trust in paper currencies is eroding around the world, and the only reason the U.S. dollar is stronger is because the euro isn't. It's not because it has some type of safe or mystical power which makes it a place of safety. It's only relative in the sense when you compare to the condition of most other currencies in the world, which for the most are even more unstable.

So within these general parameters, gold can be counted on to continue to move upward in price, no matter what type of temporary correction will take place.

Some clueless analysts and pundits try to make it look like gold is in a bubble, but it's not even close, as until the general population gets into the gold market and drives up prices without knowing or understanding the fundamentals, similar to clueless house flippers and those with HELOCs in the housing bubble, where they kept refinancing or bidding up the prices of houses like it was a game with no end, not understanding it had become a ponzi scheme which was about to come falling down around their heads.

It seems the average or everyday investor hasn't even began to invest in gold, so until that happens it won't be those who bid up the price of gold, but the things mentioned above.

There will of course be the traders moving in and out of the market which will drive gold prices up over short periods of time, and then the price gets a correction when they sell their positions to cover other unrelated investments they've lost on.

Only when the price of gold goes up at unrealistic levels for no apparent reason will be be in a bubble, and that won't happen until far into the future, as people in general still stay away from the yellow metal, as they fear that which they don't understand, and only after years of financial reporting on it and they feel safe, will they enter in. At that time the market will be close to a top, and then they'll start to bid gold prices up based on nothing else than everybody has caught gold fever.

So that's when and how a gold bubble will occur, and until then we should feel confident gold prices will continue onward and upward.

This is why Marc Faber and Jim Rogers, among others, continue to hold and invest in gold, and will continue to do so for many years to come.