Legendary commodity investor Jim Rogers has never been shy about vocalizing his opinions about the investing world. In particular, Rogers has an affinity for commodities like ags and precious metals. Gold has been one of the most talked about hard assets of the last two years, as the metal soared to all-time highs, only to watch its price take a tumble in the months that followed. All along the way, Rogers had been calling for a correction for gold, and it is a sentiment that he still holds today [for more gold news and analysis subscribe to our free newsletter].
Gold In a Free Fall
Since making highs in September of 2011, the price of gold has dropped nearly 30%, as equities have rallied and investor interest in precious metals has waned. This has all happened despite the current $85 billion monthly printing from Ben Bernanke and the Fed, which many thought would spark inflation thereby sending gold higher. Thus far, inflation has stayed low and the appeal of gold has simply faded, as investors have increased their risk appetites and sought higher yielding securities.
With the threat of QE ending and markets maintaining a bullish momentum, the outlook for gold looks more bleak as the days go on, fueling Rogers’ comments that gold has yet to finish its current correction [see also Investing In Gold: The Definitive Guide].
Rogers on Gold
One of Rogers’ major sticking points was the fact that gold had 12 straight winning years, something that is unheard of for a commodity. In fact, the SPDR Gold Trust (GLD) and iShares COMEX Trust (IAU) have never had a down year for as long as they have been around. 2013 is shaping up to be a poor yield for gold, and Rogers does not see it ending anytime soon.
“Until it scares a lot of people, the correction is not over. I would certainly like the correction to be over this afternoon and see gold go to $2,000 or to $3,000, but that’s not reality,” said Rogers. He did maintain that while he was not currently buying the asset, he also was not selling, as he firmly believes that gold will resume its bull market at some point over the current decade.
Thus far, Rogers has been right on the money with his predictions for gold over the last two years, granting more weight to his recent comments. If gold continues to fall over the coming months, it could be an enticing entry point for investors looking to time the bottom of this precious asset.
Disclosure: No positions at time of writing.