With the yellow metal down about 14% this year, wouldn't it be great to get the scoop from famed investor Jim Rogers on gold prices in 2013- specifically, why they're down, and if investors should still bet on a long-term gold bull market?
We had a chance to ask Rogers those very questions last weekend.
Sunday evening, Money Morning Executive Editor William Patalon III spoke on the phone with Rogers – who was at his home in Singapore – in a wide-ranging discussion about gold, U.S. stocks, commodities and global central banks' "race to the bottom" – or, as Rogers calls it, "race to insanity."
In this exclusive interview, the legendary investment guru took us on a tour of the gold market, taking a close look at what's driven the past 12 years of gold price gains – and what will move the yellow metal going forward.
He also pointed out the one fundamental reason why gold prices fell recently…
Jim Rogers Interview on Gold
Gold had been on a tear from 2007 to 2011, climbing about 170% in four years.
Rogers said part of that run up was due to inflation across the globe – despite what governments report. Investors typically pile into gold as a hedge against the rising price of goods.
"When I am in the U.S., I see prices have gone up for just about everything – except maybe in housing," said Rogers. "So, it's peculiar to me that they keep telling us there's no inflation. Look at education, look at medical care, look at insurance, look at entertainment."
But now metals investors fear the end of the gold bull market.
Gold prices have slipped about 27% from their peak level of $1,885 hit in September 2011.
In a recent price decline on April 12 and April 15, gold prices plunged more than $200 – their worst two-day rout in 30 years.
Many factors contributed to this month's price plunge, like the Cyprus bailout, central bank easing and Wall Street's bearish tone. Many big Wall Street firms have lowered their gold price forecasts for both 2013 and 2014.
Rogers, however, was not surprised by this price decline. He had been warning that the recent pullback was on its way.
In fact, Rogers predicted in October that gold was headed for a near-term correction, and metals markets would see further consolidation before hitting record levels again.
Gold prices have slipped about 19% since then.
With the price of gold in a tailspin, we talked to Rogers about what has happened in the gold market since the price peak – and if the yellow metal will ever hit that level again.
We discussed with Rogers how low gold could go, and when – or if – investors should load up on more. This recent price decline has caused a gold rush as physical gold buyers stock up on coins, bars and jewelry.
We asked Rogers if that was a good move, or if other vehicles like exchange-traded funds or gold-mining stocks deserved a look.