Jim Rogers Predicted Gold Fall To $1200, And Now He Thinks It Could Go As Low As $900

thenews 2013.07.06 14:17

The price of gold peaked at just over $1,900 per ounce in the fall of 2011.

And it was right around that time that commodities guru Jim Rogers began warning investors that the yellow metal could hit a low of $1,200 before the sell-off was over.

He was right.

Gold prices entered a bear market (down 20% from its high) in April. And on June 27, they touched $1,200.

In a phone interview this week, Rogers explained to us how he arrived at the $1,200 figure.

He also offers his outlook for gold as it continues its complicated bottoming process.

Business Insider: Two years ago, you told us you could see gold going to $1,200. How did you arrive at that level?

thenews 2013.07.06 18:20 #1

An article from June 24, 2013 telling a bit different things (in order to have full information on what Jim Rogers talks today and what he did then)

[This interview originally appeared on HardAssetsInvestor.com last week and is republished here with permission.]

When Jim Rogers talks, investors listen. Rogers may be the world’s best-known commodity investor, with his Rogers International Commodity Index and best-selling books, including “Hot Commodities.” HAI Managing Editor Sumit Roy recently spoke with Rogers from his home in Singapore about commodities, including whether he’s ready to buy gold after the recent plunge in prices.

HardAssetsInvestor: A lot of investment banks have recently called an end to the commodities supercycle that began more than a decade ago. Do you think they’re wrong?

Jim Rogers: I'm delighted to hear that. Bull markets climb a wall of worry. I'm not quite sure where the supply is coming from that would cause the bull market to end. Maybe they know something I don’t. But when you look back at the stock bull market from 1982 to 2000, stocks collapsed in 1987, ’89, ’90, ’94, ’97, ’98. And every time, people said the bull market is over. But it wasn’t. This bull market in commodities will definitely come to an end someday. But someday is not here yet.

HAI: What signs do you look for to determine when the bull market is close to ending or has ended?

Rogers: Well, when there’s massive new supply coming on stream, then we’ll have the end of the bull market. But the world has consumed more agriculture products than it has produced for a decade now. But worse than that, we’re running out of farmers. The average age of farmers in America is 58; in Japan, it’s 66. Many of the industrial metals are now below the cost of production.

HAI: All the talk recently has been about the recent plunge in gold. You’ve been saying, for a long time now— even when prices were hitting record highs—that you weren't going to buy until prices corrected to $1,200. Are you still planning on buying there?

Rogers: Yes, if it gets there. I bought more today [June 18], as a matter of fact. I bought a little bit, not much, over the last few days in case this was the bottom. I would not be surprised if there's another chance to buy lower later on, but I'm buying and I own it. I haven't sold any.