Marc Faber Does Not See Gold Rallying In 2010 (GLD, GDX)

Marc Faber told Squawk Box that 2009 was an excellent year for capital gains because the market was extremely oversold in the beginning of 2009. Faber said since March, the S&P is up 70%, but you won't see these kind of gains in 2010.

Marc Faber said 2010 will be a year when capital preservation will be more important because he expects a lot of volatility. He says equities could fall 10 to 20%.

Faber has no specific conclusion on how 2010 will end.

Gold: Faber does not think gold (SPDR Gold Trust (ETF) (NYSE: GLD), Market Vectors Gold Miners (ETF) (NYSE: GDX)) will rally that much in 2010, but he thinks gold is y good insurance to own if there are troubling times in 2010.

Faber said the S&P has traded essentially sideways since October (we are up 2% on the S&P since October 21st). He sees the S&P either breaking up to the upside approximately 15% and then there will be a more meaningful correction of around 20% or we could correct here 10% to 20% and then have another run to the upside. He said he's not certain yet what will happen, but the next few days will be important to watch. We will be meeting with Marc next week so we will be able to get a follow-up for you on that above question next week.

Faber said putting money into treasuries is not a good idea as a long-term investment, but near-term stocks are a bit overbought and US treasury bonds are oversold. Also, Faber doesn't like how negative the sentiment is on treasuries so Marc thinks that there could be a rebound in treasuries for one to three months.

Faber says does not see much deleveraging as the government continues to leverage up while the private sector continues to deleverage. Five years from now, Faber thinks equity prices will be significantly higher, the dollar significantly lower and gold significantly higher.

Marc Faber is the editor of The Gloom, Boom & Doom report.