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With over five decades navigating bull and bear markets, Marc Faber, the prescient mind behind the Gloom, Boom & Doom Report, issues a stark warning: “Investors who own gold are in fear. Investors who have none are in grave danger.” In a candid Financial Sense interview, Faber laid out his bold case for gold, silver, platinum, and the broader commodity complex as essential hedges in an era of reckless spending and eroding trust.

A Historical Perspective on Gold and Systemic Risks

Faber’s bullish stance on gold is rooted in his long-term observations of financial markets, dating back to his early career in the 1970s. He recalls the gold bull market of that decade, sparked by the closure of the gold window in 1971, which ended the dollar’s fixed peg to gold at $35 per ounce. “I experienced the bull market in gold in the ’70s and the excessive speculation at the end of the ’70s and then the bear market in commodities after 1980,” Faber notes, providing context for his current views. Today, he sees gold as a critical asset for investors wary of an overleveraged financial system. “My sense is that people who don’t own any gold have far too much faith and confidence in the financial system and in the sustainability of this excessive credit growth,” he warns.

Faber’s concern centers on unchecked government spending, regardless of political affiliation. “Nobody really wants to cut down on government expenditures. No, they don’t want to cut down; they want to increase it,” he observes, criticizing Republicans for defense spending and Democrats for transfer payments. This bipartisan failure to address deficits fuels his belief that gold, alongside other precious metals like silver and platinum, still offer long-term value to investors.

Gold’s Role in a World of Money Printing

When asked about gold’s price trajectory, Faber deflects precise predictions, instead pointing to the actions of central banks and politicians. “Someone will ask me, well, Marc, how high will gold go? That is a question you have to ask the politicians and the central bankers,” he quips. With gold surpassing $3,000 per ounce, Faber acknowledges potential volatility—“we could easily drop $500”—but remains steadfast in his long-term optimism. “As long as the money printing continues, gold will tend to rise”, he asserts, citing ongoing monetary expansion as a key driver.

Faber sees current U.S. policies, particularly under the Trump administration, as a catalyst for gold’s ascent. “He’s a gift of heaven for gold. A completely ignorant interventionist who is a money spender,” Faber says of Trump, pointing to multi-trillion-dollar deficits and policies like the “one big beautiful bill” as evidence of fiscal recklessness. He argues that Trump’s push for a weaker dollar to boost exports further bolsters gold’s appeal. “It is, of course, for a foreigner or for a central bank, not very encouraging to have the president of a country that has the world’s reserve currency, the US dollar, telling the world he wants to have a weaker dollar; then it’s an encouragement to buy gold,” he explains.

Platinum: A High-Reward Opportunity

While gold dominates discussions, Faber is particularly enthusiastic about platinum, which he views as undervalued relative to gold. “The price of platinum has fluctuated around the price of gold. Occasionally, the price of platinum is higher, and occasionally, the price of platinum is lower than gold. And recently, it was at a 122-year low against gold,” he notes, referencing historical price ratios. Citing the principle of mean reversion, Faber argues that platinum’s current price—around $1,300 per ounce—offers a compelling risk-reward profile. “I take the risk of a 20, 30% decline in platinum, but if I have the potential to go up 200%, and the risk is 20, 30%, I think the risk-reward is quite favorable,” he explains.

Faber also highlights platinum’s smaller market size, which makes it susceptible to significant price moves. “The platinum market is much smaller than the gold market, and someone like Russia or South Africa could easily squeeze the platinum market,” he suggests, noting that coordinated buying by hedge funds could push prices “through the roof.” He envisions platinum potentially exceeding $3,000 per ounce within a year or two, describing it as a “genuine breakout with lots of momentum”.

Commodities: Undervalued Amid Financial Asset Speculation

Faber’s bullishness extends beyond precious metals to the broader commodity sector, which he believes is significantly undervalued compared to financial assets. “Commodities are very inexpensive relative to financial assets,” he states, contrasting the lack of speculative frenzy in commodities with the “huge gambling in financial assets” like Nvidia options. Reflecting on the 1970s commodity boom, when “everybody in Hong Kong knew the price of gold every minute,” Faber notes a stark absence of such enthusiasm today. “I do not see any excessive speculation in gold and silver at the present time,” he observes, suggesting untapped potential in the sector.

He attributes this undervaluation to excessive liquidity from central banks, which has disproportionately inflated financial assets. “The Fed and other central banks, they’ve kept on printing money. Excessive liquidity,” Faber explains, noting that while higher interest rates have squeezed lower-income households, wealthier investors like himself benefit from rising yields on deposits. This dynamic, he argues, underscores the disconnect between financial assets and commodities, with the latter poised for a catch-up.

Emerging Markets and Geopolitical Considerations

Faber remains optimistic about emerging markets, particularly Latin America, which he sees as a hedge against geopolitical risks. “If you have, let’s say, you’re a wealthy individual, and you have assets in Europe, in the US, and in Asia, why not have some assets in Latin America?” he asks, noting that the region is less likely to be a “war theater” in a potential global conflict. He points to strong performances in markets like Brazil and Hong Kong, driven by high dividend yields and undervaluation relative to U.S. markets.

Faber’s enthusiasm for emerging markets is tempered by his broader concerns about wealth inequality and social instability. “The typical household in Europe and in the US, its standard of living is declining. Why? Because the wealth is being transferred from them to a few rich people,” he argues, citing The Economics of Inflation by Costantino Bresciani-Turroni as a key text on inflation’s societal impacts.

A Cautionary Note on Society and Gold

While Faber is a staunch advocate for gold, he warns that a soaring gold price signals deeper societal issues. “In societies where the gold price goes ballistic, the breakdown of society is not far in the future,” he cautions, emphasizing that gold offers partial protection but not immunity from systemic collapse. His advice to investors is pragmatic: hold gold and other precious metals for safety, but remain vigilant about global risks. “We owners of precious metals have to hope that Trump remains in office for a long time—that’s really the key,” he jokes, linking gold’s prospects to the continuation of current fiscal and monetary policies.

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