Jim Rogers, renowned global commodities investor and author, says gold prices will hit $2,000 (U.S.) in a decade.
Gold prices have risen 20 per cent in the past year, recently testing a new high of $1,133.50. With strong speculative fund buying, a weakening U.S. dollar and inflation fears, investing in gold is a popular trend as the precious metal becomes an alternative asset class.
Physically backed SPDR Gold Shares has risen almost 15 per cent YTD and Market Vector Gold Miners ETF has popped over 30 per cent.
Rogers' love of gold is nothing new, but with gold in a strong bull market, I wanted to know if the trade was too crowded.
Jim Rogers: I don't ever like to buy something making all time highs however I'm not selling my gold. Gold is going to go much higher in the course of the bull market. Doesn't mean it can't go down 20 per cent next year but during the course of the bull market it is going to go much higher it is certainly not a bubble yet.
Jim you are typically a contrarian investor. If everyone is buying, shouldn't you be selling?
Jim Rogers : Yes, I should be selling at the top, but I don't think this is the top. Gold, if you adjust it for its old highs, adjust it for inflation back in 1980, gold should be over $2000 an ounce right now. In my view, in this bull market in commodities gold will make all new highs adjust for inflation.
What about mining stocks as a way to play rising silver and gold prices?
Jim Rogers: Not with my money. The studies show that you would make more investing in commodities themselves rather than commodity stocks unless you are a very good stock picker. If you are a good stock picker, unless you find a company that is going to discover silver in Berlin you buy all you can and then you call me and I'm going to buy it too ....short of something like that and there are a hundred gold stocks and most of them don't pan out. But if you own gold, gold is making all time highs.
Aside from gold, what other precious metals do you own?
Jim Rogers: I own silver as well. I would suspect that if you were buying [gold or silver right]now silver would be a better buy. I mean gold is making all time highs, [but]silver is 70 per cent below its all time high. Now, if my thesis is right about commodities that they're going to make new all time highs, obviously you would make that much more [money]in silver than in gold.
What about palladium and platinum?
Jim Rogers: I own them all. I think probably now the better plays would be palladium and silver but again let me hit you over the head and say I am world worst market timer and trader. I think you would make more money with silver and palladium at this point but I own all four [gold, silver, palladium, platinum]
What would you say would be the best diversified portfolio right now?
Jim Rogers: If the world economy is going to get better , commodities are going to lead the way because there are shortages developing in all commodities. If the world economy is not going to get better, I promise you stocks are not going to be a good place to be, but commodities will be the better place to be because they're printing so much money. And if the world economy doesn't get better they are going to print a lot more money. So if you're going to own something you should own commodities or you should own currencies. That's another way that you can invest in what's going on in the world.
When will gold hit 2k?
Jim Rogers: I wish I was that smart. You should watch TheStreet.com. They know everything.