Jim Rogers Still Bullish On Gold Prices, Bearish On Governments (GLD, SPY, VGK, FXI)

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April 30, 2012 12:45pm NYSE:FXI NYSE:GLD

Jonathan Yates: The lack of a fresh round of quantitative easing from the Federal Reserve and better U.S. economic data has driven the price of gold (NYSEARCA:GLD) lower.

Over the last quarter of market action, GLD is down by 4.09%, while for the last month of trading, it has fallen 2.91%. Despite this, in a recent HardAssetsInvestor.com interview, legendary investor Jim Rogers maintained his bullish stance on gold.

In terms of price levels Rogers stated:

“… if gold gets to $1100 or $1200 or $1300, I would hope I’m smart enough to buy more. I don’t know if it’s going to go there or not. I may buy it at $1850 if war breaks out with Iran. It depends on what happens in the world. What I said was that it won’t surprise me if gold goes down much lower; that’s normal for the way markets work. And if it goes there, I hope I’m smart enough to buy more. But if it goes to $1,550, I would probably buy more. Just depends on what happens.”

Rogers is keeping this position despite contrary economic data from governments, noting that, “It really doesn’t change my view… as if you think some government statistics — which are wrong at late — would affect anything in my investment world. No, I don’t even know or pay attention to such things.”

As little value as Rogers places in government statistics from the United States and Europe (NYSEARCA:VGK), he does not even follow those from the People’s Republic of China (NYSEARCA:FXI). Rogers observed it’s hard to do:

“… since China doesn’t publish too much about it. But I know that China has got a campaign encouraging the Chinese citizens to own gold. I know shops have sprung up everywhere. And the good banks are now offering gold everywhere. So there’s been a huge change in China in the past five years. And whatever they’re producing, I presume most of it they’re selling to themselves. They know that gold consumption has gone up a lot in China. They claim that they’re the largest producer of gold in the world now. I have no reason to doubt that claim. Lots of dramatic changes have taken place in China versus gold in the last few years.”

Year to date, SPDR Gold Shares (NYSEARCA;GLD) is up 5.02% while the Standard & Poor’s 500 Index (NYSEARCA:SPY) has risen 11.40%. Rogers is short both American and European equities, advising investors to “worry about 2013. Be panicked about 2014.”

Written By Jonathan Yates From Emerging Money

Emerging Money provides insightful and timely information about the increasingly important world of Emerging Market investments. CNBC Emerging Markets Contributor Tim Seymour leads the team of Emerging Money to bring you cutting edge global news and analysis.

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