Why Jim Rogers is worried about gold
Wednesday, December 19, 2012
Gold prices have been falling lately as investors ditch the yellow metal and opt for the safe-haven U.S. dollar, a trend that could carry on into 2013, said noted commodities investor Jim Rogers.
Fears the United States may careen over the dreaded fiscal cliff and go into a recession have sparked heavy safe-haven demand for the dollar, a popular asset in times of uncertainty that traditionally moves inversely from gold.
Spurts of optimism have typically seen investors ditch the dollar and chase nicely priced equities over gold since inflationary pressures remain at bay.
Gold prices, which rose for over a decade, are trading a little over $1,665 an ounce, down from a record of over $1,920 an ounce hit in late 2011.
Now might not be the time to dive back in.
"Just be careful, there are too many bulls, including me, but I'm very cautious," Rogers told CNBC.
"Gold is having a correction — it's been correcting for 15 to 16 months now — which is normal in my view, and it's possible that [the] correction is going to continue for...
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