In a detailed interview this week, famed investor Jim Rogers urged investors to fasten their seatbelts and hold on.
In his words, “the next bear market is going to be the worst in my lifetime.”
Rogers is legendary for his hands-on investing style and long-range market perspective, as he had the foresight in 1973 to found one of the most successful hedge funds ever – Quantum Fund – with George Soros.
That’s why the media listens when he speaks out about the risks in today’s stock market.
“It’s been ten years since we have had a bear market,” Rogers said in an interview this week. “That is very, very unusual.”
In his opinion, a correction of over 50% is more than possible in the next year or less.
“There are so many problems out there in the world. Interest rates are going higher and it looks like Mr. Trump wants war (or at least a trade war). None of these things look good for our market, especially after a 10-year bull run,” he added.
“Before this is over, gold will go through the roof,” said Rogers. “When people lose confidence in governments and paper money, they always buy gold and silver. They always do and they always will.”
Recent market conditions for gold seem to bolster this view!
GOLD JUST HIT HIGHEST PRICE SINCE 2016
Gold has held its own in 2018 amid gut-wrenching turmoil in the stock market.
Last week, gold hit the highest price level seen since mid-2016. It also notched its second week of weekly gains. Gold has broken through the $1,350/ounce price level four times in the last six months alone.
What is going on?
Open any paper or news website and the direction of our world is clear.
The U.S. dollar has been weakening this week in advance of a tricky meeting between President Trump and the Japanese Prime Minister. They have North Korea to discuss, among other hot-button issues.
Geopolitical events have also fueled the current rally in gold and could take the yellow metal higher soon.
Investors remain worried about rising military tensions over Syria, especially as Russia has reportedly blocked international inspectors from the country. This could lead to direct confrontation between the U.S. and Russia, though the recent retaliatory missile strike was coalition-led.
In addition to all the attention spotlighted on Syria, there are still considerable lingering concerns over an escalated trade war with China. It is hard to separate bluster from real policy at this stage, from both sides, so a wide range of outcomes and impacts are possible.
Uncertainty is rarely good for stocks…
MARKET EXPERTS SPEAK OUT ON GOLD
Deutsche Bank AG analyst Michael Blumenroth sees volatility and geopolitical risk in the stock market growing over the situation with Russia and Syria. He reports heavy buying of gold in Germany and China in response to turbulent market conditions.
Piper Jaffrey’s chief market strategist Craig Johnson points to gold’s recent strength as a clear sign that the market is in trouble. In his view, gold usually does better than stocks when there is excess fear in the market or investors anticipate slower growth.
According to Johnson, we may not be in the pro-growth trend we are told we are in. We’ve got tax cuts in place, the economy is supposed to be doing better… then why is gold moving up?
The answer is an easy one, according to Sprott Asset Management CEO John Ciampaglia. He says gold’s appeal as a haven is being bolstered amid the current U.S. administration’s shifting tone on issues including trade and military action in Syria.
Ciampaglia notes that gold has played the role of a safe-haven asset throughout history.
Bloomberg Intelligence commodity strategist Mike McGlone is confident a gold rally is in the cards for April, and he thinks there is not much that can derail it. In fact, McGlone thinks something unusual would have to happen to prevent the next leg of gold’s rally.
No wonder that Sharps Pixley, a London gold store, saw a 253% increase in physical gold sales last month compared with the same period last year. Sharps Pixley CEO Ross Nerman says gold has been a long-term wealth preserver for over 4,000 years and never more so than during periods of turmoil.
GOLDMAN SACHS BULLISH ON COMMODITIES
Goldman Sachs says the case for owning commodities has rarely been stronger.
Why? Signs of higher inflation are popping up everywhere.
Goldman believes a long era of low oil prices and a plentiful supply of oil is coming to an end just as geopolitical tensions are causing crude prices to rise. In addition to providing a higher floor for oil, the market is vulnerable to a “super spike” if there is any significant supply disruption.
Gasoline prices are highly vulnerable and are expected to hit a four-year high this summer. This is a powerful “pocketbook issue” for everyday Americans who like to hit the road in the summer.
HIS Markit vice chairman Daniel Yergin says any excess cushion in the oil supply is gone.
WHEN TIMES GET TOUGH, INVESTORS TURN TO GOLD
Rising geopolitical tensions, higher inflationary conditions and gut-wrenching volatility in the stock market.
Three reasons why gold has rallied this year while other markets have suffered.
Unlike the pummeled U.S. dollar, the value of gold cannot be debased by politicians and central bankers.
There are many favorable trends that favor investing in physical gold and silver for the long term as a possible pillar in your retirement portfolio.
Gold is a safe-haven in troubled times and you would be wise to seek shelter now before prices climb even higher.