‘If there is a stock market problem, gold is going to go very high’: Investor Jim Rogers on gold prices, futures
Veteran American investor Jim Rogers on Wednesday said that gold prices may go very high if the stock market crashes globally in the coming months. In times of volatility in the equity market, investors lean towards gold due to its safe haven status. Expressing similar views, Rogers told Business Today TV Managing Editor Siddharth Zarabi that the investors should not sell their gold as it might appreciate to a greater level in the coming days.
“Gold prices have been down for many years. In the recent months, it started moving. Whenever a commodity, which has been static for a long period, starts moving, it gathers momentum. That’s what is happening with gold right now. The momentum is building and who knows how high the gold rates will go,” Rogers told Business Today TV.
He added: “I am expecting problems in the equity market to escalate in the coming months. Whenever we have problems in the equity market, many people will turn to gold and silver as protection. I am not selling my gold and silver. If possible, if the rates come down, I will buy more.”
Gold prices have been experiencing a significant surge in 2024, with a remarkable rally that has propelled them to an unprecedented all-time high of over Rs 73,000 per 10 gm. This surge represents an impressive increase of approximately 21.1% within the span of just one year.
In the face of global political and economic instability, gold, of late, has become a preferred asset for investors, experiencing a substantial increase in value. This surge in gold prices has been catalysed by the military actions of Russia in Ukraine and the ongoing tensions between Israel and Palestine. Nonetheless, the sustained and robust appreciation of gold’s value, reaching over $2,400 an ounce, can be largely attributed to the impact of China’s economic activities.
On central banks buying gold in the current market, Rogers said that them buying gold means word of caution. “Central banks often sell gold for their own use. But if they are not selling but buying, who knows they might be looking at turmoil coming to the financial markets.”
According to the report by the World Gold Council (WGC), central Banks’ worldwide purchases of gold surged to 1000 tons in 2022, doubling the annual average of 500 tons observed over the past few years. This elevated level of acquisition continued through 2023.
The Reserve Bank of India’s (RBI) gold reserves rose to 822 trillion, which is its highest in any quarter. It bought 8.7 tonne of gold in January 2024, making it the largest purchase by the central bank since July 2022. The RBI’s gold holding has climbed to 812.3 tonne in January, from 803.58 tonne in December 2023, according to the World Gold Council data.
RBI started the acquisition of gold in 2018. Prior to this, its last major purchase was a 200-tonne addition in 2009 amidst the worldwide financial crisis. In the initial ten months of the ongoing fiscal year, the central bank has increased its gold reserves by approximately 17.7 tonnes.
Price-wise, gold was steady on Wednesday, as market participants awaiting fresh cues from US Federal Reserve officials for further clarity on the timeline for potential interest rate cuts. Spot gold held its ground at $2,314.29 per ounce, as of 0037 GMT. U.S. gold futures lost 0.1% to $2,322.90. A year ago, the price of spot gold was trading at $2000 per ounce.
In India, gold prices on the MCX were around Rs 71,163 per 10 grams on Wednesday, hitting an intraday low of Rs 70,901.
