Gold soared 650% from August 1999 to August 2011.
But it’s down 24% from the $1,885 peak and in recent days has whipsawed gold investors in a way they haven’t experienced in 30 years.
The bear market has gold bugs reaching for the Dramamine. But we reached for the telephone instead and dialed Singapore – and legendary investment guru Jim Rogers.
Many of Wall Street’s biggest investment banks are calling for additional blood-letting – meaning gold prices have a lot more room to fall. But in his usual contrarian manner, Rogers dismissed the consensus.
Indeed, the former hedge-fund manager and best-selling author believes this is a badly needed – even healthy – price correction.
And that will set the stage for a new bull market in gold – and a run to record prices that are sure to come in an era of cheap-money policies by the world’s central banks, Rogers told Money Morning during an exclusive interview.
“Gold was setting us up for some kind of correction,” Rogers said in a Sunday night telephone interview from his home. “Gold needed a correction – it still needs a correction – and I hope this is the proper correction which gold needs. Then gold – somewhere along the way – will make a bottom and we can all join in the bull market as [it] goes higher and higher.”
And make no mistake: The shiny metal is going higher – much higher.
“Gold has to go a lot higher over the next decade or so, because [the world’s central banks] keep printing money,” he said.
Of course, it was just one week ago when gold suffered its worst two-day rout in 30 years. And even though that’s been followed by a five-day winning streak that was capped off by a 2.3% gain yesterday, gold is still in bear-market territory.
“Gold is going to shake out the mystics – there are still a lot of mystics in the market,” Rogers said. “I have guys writing me saying this couldn’t be happening. I say, “Well, get out your quote machines, it is happening’.”
April 23, 2013