Marc Faber is bullish on gold and oil and gas stocks.

Given the abundant speculation about the Federal Reserve and interest rates, Marc Faber told CNBC last week he believes the Fed is closely watching the market reaction to its intimations it may raise rates in June. If the market reacts very negatively, it could hold off raising rates, while a relatively stable market could signal the OK to the Fed to raise the rate by a quarter-point.

Generally, higher interest rates support a higher U.S. dollar and weaken demand for gold as gold does not pay any interest.

However, Faber says he believes that the Fed will not raise interest rates next month. “My view is that in June, they [the Fed] will not move; they will not increase rates,” Faber stated. “The market will begin to perceive that the Fed wants to support active markets, which they have stated on numerous occasions before,” he added.

In that environment, “gold, which from now on may correct, maybe 5% or so, will start to move up again,” Faber said.

Faber recommends a diversified portfolio. “To own some real estate makes sense, to own some equities makes sense, to own some cash and bonds probably makes sense, and to own some precious metal makes sense.”

But Faber’s view is some sectors will do better than others. “I can see more money printing in the future, which will lift some sectors,” Faber said and went on to name them: “The most attractive assets in my view are gold shares and oil and gas shares. I think they still have significant upside potential this year.”

Marc Faber is author of the Gloom Boom and Doom Report

related: Two Overlooked Streaming Stocks with Huge Upside Potential