Rogers believes that gold is probably going to fluctuate for another year or two before making its final bottom. Although he “got it right” that gold went to $1,200 (where we also bought some) he does not believe this is the final bottom.
The anomaly with gold is that it went up for 12 years in a row. There has been no other asset class before that went up so strongly. Therefore it is reasonable to expect that the bottom (whenever and wherever it is) will be unusual too. A correction of 50% which would make gold go to $900 is not unusual in the markets. What made gold unusual is that it went up for 12 years consecutively.
Going forward, gold’s main driver is the 20 year bear market from 1980 to 2001. It implies that the bull market has still a way to go. Furthermore, other major drivers include absurd government policies like money printing and deficit spending.
Jim Rogers believes that India is a reason gold is going down. Indians are doing everything to keep their citizens from buying gold. The reason is that the account deficit is very high in India and their government wants to discourage buying gold in order to stimulate consumption.