Jim Rogers on Precious Metals: Gold will hit bottom end of 2014, prefers silver to gold

Mainstream financial experts are forecasting a down year for precious metals, particularly gold and silver. This week, it was reported that Goldman Sachs is predicting the yellow metal would decline to $1,050 by the end of the year, which would be an approximate 16 percent decline from the current prices.

It could come as no surprise that some investors in the financial community are holding back on precious metals because the government continues to promote the idea that the economy is improving, while others feel inflation is tame – not to mention the Federal Reserve is tapering by $10 billion.

Jim Rogers, chairman of Rogers Commodities Index and contrarian investor, spoke with the Economic Times Friday to discuss his outlook on precious metals. He concluded that silver is a better investment than gold right now, but he wouldn’t acquire either at the present time.

According to author of “Hot Commodities,” there are a tremendous amount of shorts in the precious metals market because 2013 was a bad year for gold and silver. This could very well lead to a rally, says Rogers.

“There are huge shorts that have developed in precious metals as you know. So they are overdue for a rally. We have had a big drop in 2013 and everybody got negative and everybody got short,” said Rogers. “So we are going to have a rally, though not too much of the rally. I am not going to either buy or sell that rally, but there will certainly be a rally.”

Rogers also sees things falling again by the end of the year, something that he hopes for because then he can start buying again. He concluded that silver would be a better option to purchase than gold.

“Later in the year, things will go down again and hopefully finally, we will make a nice bottom and we can buy gold again. I would prefer silver to gold. I am not buying either at the moment. Silver is down 60 percent from its all-time high and gold is down 30 percent or 35 percent from its all-time high. However, I am not going to buy either at the moment. “

As of publication, gold is trading at $1,251, while silver is up at $20.30.

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