Since the beginning of the year, gold has made some gains and is presently trading at around the $1,300 mark. The big financial institutions project the yellow metal to fall this year to near $1,000, while some contrarian investors say gold will rise substantially in the next few years because of Federal Reserve monetary policy.
According to Jim Rogers, legendary investor and founder of the Rogers International Commodity Index (RICI), now is not the time to buy gold, but there could very well be another buying opportunity within the next one two years.
Rogers stated in an interview with Every Investor this week that it’s not unusual for elements in the markets to have 50 percent corrections every few years. The thing with gold is that it “has been acting perhaps stronger than most markets do.” He noted if gold were to drop to $960 and increase to $1,000 then he hopes he would be “smart enough to buy more and a lot more.”
“I just mention the point that it is abnormal what gold has been doing for the past 10 or 15 years. So, I expect another chance to buy gold, at what price I have no idea,” said Rogers. “If America goes to war with Iran I’ll buy at $1600 and be happy to get it, if I can get it. So, when I say another chance to buy gold I am not so much making a price prediction as saying there will be another chance to buy gold.”
The bestselling author of “Hot Commodities” further explained that it has been quite strange that the precious metal rose for 12 consecutive years without experiencing any declines. Although he isn’t buying gold right now, he does recommend investors who don’t own any to begin purchasing “some gold as an insurance policy if nothing else.”
“Everybody has car insurance and fire insurance. You hope you never use it. Well, everyone should have some gold in the same way,” added Rogers. “I buy gold as an insurance policy but also because I hope to make money, and a lot of money, someday. If people do not have any gold yet, they should find a time when it’s going down to buy some, because everyone should have some gold as an insurance policy if nothing else.”
Within the next decade, Rogers, who has conceded that he isn’t the greatest market timer in the world, believes gold will “go much, much higher” because there will be a lot of turmoil in currencies, politics, economies and militaries. He admitted that he doesn’t know where gold will go to, but he thinks it will rise due to the U.S. dollar being under pressure.
He was asked if he preferred futures or coins in which he opted for coins. The reason for this is because in an emergency physical gold, particularly coins, can help in a wide variety of situations, such as crossing the border and purchasing groceries.
“Many more people will recognise gold coins, not everybody of course. They will also participate in any upside there is gold but, if nothing else, in an emergency they are your best choice,” said Rogers.
Rogers is a favorite in the libertarian community because he has been an avid opponent of the Fed and has called its quantitative easing program a pure “disaster.” In many interviews with the media over the past several years, he has been at odds with hosts (5) discussing the dangers of central banking policies and how precious metals, agricultures and other commodities are better investment vehicles.
