Gold, which tumbled into a bear market last week, is in need of a correction, according to investor Jim Rogers, who said that he is not buying the commodity yet as it has not dropped enough.
“This may be the correction that gold needs,” said Rogers, chairman of Rogers Holdings, while reiterating a forecast that bullion will go higher over the next decade.
“If it goes down enough, I will start buying it,” Rogers told reporters in Singapore yesterday, without identifying a level.
Gold extended losses to the lowest price in more than two years yesterday after investors cut holdings in exchange-traded products as the US recovers.
Rogers, who foresaw the start of a commodity rally in 1999, has previously backed bullion to rally as central banks including the US Federal Reserve boosted their balance sheets to stimulate economic growth. Gold has lost 16 percent so far this year after rallying for 12 years.
Bullion for immediate delivery lost as much as 5.3 percent to US$1,404.05 an ounce, the lowest level since March 2011, and was at US$1,406.51 at 5:38pm in Singapore trading yesterday.
Goldman Sachs Group Inc forecast that bullion may tumble to US$1,390 an ounce over 12 months, according to a report on Wednesday last week.
While higher inflation may be the catalyst for the next cycle, that is probably several years away, Goldman said.