Tuesday, September 27, 2011

Jim Rogers Talks Commodities: "Gold Could be Down For Months. Buy Agriculture" (GLD; DBA; MOO)

From India's Economic Times:

Gold price correction will last for several months; buy on dips: Jim Rogers
In an interview with ET Now, Jim Rogers, Chairman, Rogers Holdings, shares his outlook on commodities and the falling rupee. Excerpts: 

Gold has been down 10% in the past week and is at an 8-week low today. Given this, what is your outlook for gold prices and do you see gold near $2000 per ounce in the near to medium term?
We have discussed before that gold has been up 10 years in a row, which is very unusual in any asset class. So if it is up this year or 11 years in a row, gold is overdue for a correction and it could have a nice substantial correction given that it has been so strong.

I have no idea what is going to happen this year. I doubt if it will go to $2000 an ounce in 2011, it is more likely to have a correction which will last for several weeks, several months. It has been very strong. If it goes down some more, I would buy more gold as I have told you many times.

Silver has been one of your favourites, but that is down 24% in the past week. Are you still buying?
Not yet, but if silver continues to go down as we have discussed before, I will buy more silver too. Do not sell your silver, do not sell your gold unless you are a short-term trader, but anybody who is in this for a long term, silver and gold will both go much higher over the next few years....MORE

...Then, let's talk about base metals. Copper has seen quite a drubbing down 30% over the last one month. Are you seeing more downside for most of these base metals?
That is a big big sell off, 30% in anything in that shorter period of time. So it is a shock, but I would expect most things to continue to correct and react because the world has got serious problems facing in the future. Base metals will be affected by reduced demand.
Other commodities will continue to do well, but base metals certainly would be affected by reduction in demand and you know what is happening in Europe, you know what is happening in America. So be careful. I am not selling any of my commodities. I am not selling my base metals, but I am not jumping in to buy either.

Once we have seen a consolidation in prices, where do you believe we are going to see buying opportunities emerge first?
It will come in the commodities, probably agriculture will be bought first. I am thinking about buying agriculture right now. I am not thinking about buying base metals or gold or oil right now, but I am thinking of buying agriculture maybe this afternoon. Elsewhere the man who come first probably precious metals, second then the rest of the commodities.

So overall what you say is that the kind of correction that we have seen in commodities has been a surprise to you, were you expecting such a sharp fall?
Given that stock markets around the world are collapsing is not such a surprise, but to answer your question, no I certainly did not expect it to be this hard, this fast with commodities coming down, absolutely not.

Tell us what is the outlook going forward as large commodity consumers like the US and China are showing clear signs of slowing down?
I am thinking about buying agriculture as we speak. I own commodities. I am not selling any commodity. I have so short emerging markets and European stocks and American technology stocks, but I mainly long commodities and currencies. I would not sell commodities and if you need protection in your portfolio, I would think about buying commodities and you might even buy agriculture today or I might buy agriculture today.

Then what would be your strategy? Would it be different on agri-based commodities and different for industrial commodities like base metals and crude oil?

HT: Clusterstock