July 1st, 2015
by David Zeiler, Associate Editor, Money Morning
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A Jim Rogers gold prediction is taken seriously by investors.
And today (Friday) we got a fresh Jim Rogers gold prediction courtesy of a MarketWatch interview.
"Gold is in a correction, and the correction has gone on for four years," Rogers said. "Although I am not buying gold, I am expecting an opportunity to buy gold sometime in the next year or two. For instance, if gold goes under $1,000, I hope I'm smart enough to buy a lot more gold."
When Jim Rogers speaks, he is taken seriously by investors - and for good reason.
He achieved legendary Wall Street status with The Quantum Fund, which he and partner George Soros founded in 1970. It's often described as the first real global investment fund.
Over the next decade, The Quantum Fund gained 4,200%, while the Standard & Poor's 500 Index climbed about 50%. After he "retired" from Wall Street in 1980, he predicted the meteoric growth of China, as well as the rise of commodities.
Rogers is known as one of the yellow metal's biggest fans - but he has a realistic outlook on what affects its price.
Rogers told MarketWatch:
"Part of the problem is that many people consider gold to be holy. They are mystical about it. Some mystics are surprised that gold goes down at all"
Rogers has no such illusions. That gold price figure of under $1,000 is based on a long-standing expectation that the gold correction could end up as much as 50% of the $1,885 peak in August 2011.
At about $1,173 an ounce, gold is currently down about 38% from that peak.
Jim Rogers' gold outlook is mostly based on history and trends. He told MarketWatch that a 50% correction in a commodity is "normal."
And he told Money Morning in 2013 that the correction was far from over...
Jim Rogers Gold Correction Forecast
Rogers has held a circumspect view on the gold correction for at least two years. In an April 2013 interview with Money Morning Executive Editor Bill Patalon, Rogers said that the gold correction didn't surprise him and wasn't over.
Rogers told Patalon:
"Gold has one correction of 30% - as much as 30% - in 12 years. Now that's very strange. Most [assets] correct 30% every year or two. That's just the way markets work. The peculiar action in gold has been the 12 years [without that correction]."
Rogers also told Patalon that in the world of commodities, pullbacks of 40% to 60% are not unusual.
Clearly, Jim Rogers is a patient man. He's just waiting for his chance to buy gold as cheaply as possible. And he hasn't sold any.
Whatever happens with the current correction, Rogers remains convinced of gold's value as an investment. And the long-term Jim Rogers gold forecast is for prices to go up - eventually.
Rogers told MarketWatch:
"When the next problem comes, people will lose confidence in the government, central banks, and paper money. That's when gold goes up the most."
The Bottom Line: Legendary investor Jim Rogers is holding off on buying gold while he waits for the current gold price correction to bottom out. But when that happens, he will buy more gold. The long-term Jim Rogers gold outlook is for higher prices driven by government and central bank miscues.