#overdue correction

[thehopefulwonderlandcollector]

[liquidinvestments]

Jim Rogers: Gold Correction is Long Overdue

Gold suffered the worst single-day price drop in 30 years, one of 9% on April 15th 2013, and silver too collapsed 12%. Explanations for the dive ranged from the strengthening US dollar, to the reduced holdings of gold exchange-traded funds, but Jim Rogers believes that gold’s plummet was not surprising. He believes gold is in line for a long-overdue correction. “Whenever things go down, people look for reasons,” says the famed investor and Street Smarts author. 

“But the main reason is … gold was up 12 years in a row without a down year--that’s extremely unusual.” 

It wouldn’t be the first time Rogers had correctly called it. He foresaw both the housing bubble of 2007, as well as the commodities boom that started at the turn of the century. For him, the continued bouts of QE from the US central bank (as well as the Bank of Japan) is ‘good news’ for those of us holding onto our gold. As long as there are widespread fears over inflation, the price of gold will move up.

“One [thing] I’ve learned in the investment world, when something is ‘good news’ for [some asset] and it goes down, you better be very worried, so of course it looks bad for gold right now,” Rogers tells us. “There’s massive amounts of ‘good news’ It should be going up.”

Unfortunately, the world’s no. 1 gold consumer is doing everything it can to ‘kill gold’. India has already introduced tax hikes on imported gold, as well as placing restrictions on gold imports by banks. Rogers adds, “If India really does a lot, who knows how low gold can go. But if it happens, buy all the gold you can.”

Whilst Rogers is adamant that gold is experiencing a “long-overdue correction,” he stated in the interview that the price would have to drop to $800 per ounce for him to be worried that this was more than just a correction.