Gloom, Boom and Doom editor Marc Faber says investors should hold off buying India's stocks even though its government will allow individual foreign investors direct access to the Sensex beginning Jan. 15.
"What we will have in 2012 is initially maybe some further weakness in emerging economies against the US market and then a major low in emerging stock markets, including, India," Faber told CNBC.
"I was looking for India to bottom out the Sensex between 12,000 and 15,000 and we are getting there slowly."
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Investing in the U.S. is "correct for the next three months or so but I would rather be looking at an entry point in markets like India over the next six to nine months," says Faber.
| Marc Faber
(Newsmax file photo)
Forecasting free markets is very difficult, Faber notes, but today’s markets are manipulated, not free.
"If the S&P drops another 10 percent you can be sure that there will be more QE (quantitative easing) in the U.S.," Faber says. "So the markets would be supported by additional liquidity injections."
Faber advises investors to distinguish between precious metals and industrial commodities. "My concern is that the Chinese economy is going to be weaker than is expected and that the demand for industrial commodities will probably disappoint," he says. "So I am not particularly keen on buying industrial commodities at this stage."
"In the case of gold … we had a 10-year bull market and we peaked out in dollar terms on September 6. 2011 at $1,921 per ounce … and we are in a correction phase."
Faber believes this correction phase is not completely over. "We may have a trading rebound year -trading rally and then some further weakness into possibly February-March and then probably a major low," Faber says.
"Then the question will be whether the precious metals rally again and will they exceed the peak of 2011 or not."
Forbes reports that, according to In the Kitco News Gold Survey, 14 out of 32 respondents surveyed on gold prices see prices up, while four see prices down, and one was neutral. Respondents included bullion dealers, investment banks, futures traders, money managers and technical chart analysts.
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