Jim Rogers: Gold to Go Much Higher

Posted on: February 22, 2012

Gold eased from a two-week high Wednesday as optimism over the Greek bailout dissipated and gave way to concerns over Europe’s finances. As of 6:41 a.m. PT, gold was trading $1,754 an ounce on the New York Spot Market, while silver eased to $34.13.

Gold prices rallied Tuesday on a stronger euro following the approval of a 130 billion euro bailout for Greece by Eurozone finance ministers, which helped assure markets that the country would avoid a default in the near-term. Optimism faded on Wednesday however, as investor sentiment shifted to concern over the implementation of austerity measures and economic growth. “Even assuming the new Greek program proceeds as planned, the Greek government crisis is far from over,” said HSBC in a note. “This deal will help creditors to be repaid, as the funds will be channeled into an escrow account to ensure that lenders are prioritized, but it will not revive economic growth any time soon.”

Despite progress, analysts are increasingly doubtful that Greece will avoid a default in the long-term. Fitch ratings agency fueled those concerns on Wednesday after slashing its rating for Greek sovereign debt to “C” from “CCC,” indicating that default is “highly likely in the near term,” according to CNBC. “In Fitch’s opinion, the exchange, if completed, would constitute a ‘distressed debt exchange’ in line with its criteria and consequently yesterday’s announcements set in motion the agency’s process for reviewing Greece’s issuer and debt securities ratings,” Fitch said in a statement.

In an exclusive interview with the Economic Times, renowned investor and billionaire Jim Rogers says gold prices are poised to climb “much higher” in the coming years as central banks around the globe continue to debase their currencies in an effort to stimulate growth. According to Rogers, “Throughout history when you have people printing money and debasing currency, the way to protect yourself and to make money is to own real assets. You now have the Bank of Japan, the Bank of England, America, the Chinese apparently are loosening up. Everybody is now loosening the money supply, printing money. That’s good for real assets.”

Rogers went on to say that commodities will increase in value regardless of the health of the global economy. “If the world economy gets better, the shortages of nearly all commodities are developing and I am going to make money in the commodities. If the world economy does not get better, they are going to print a lot more money,” said Rogers. “Gold is going to go much higher over the course of this decade. Do not sell your gold, not yet.”