Jim Rogers, financial guru and founder of Rogers International Commodity Index (RICI), believes the “supercycle” of the commodities market will continue to push ahead, while “depressed” palladium remains one of the best investment picks in the sector.
Speaking in an exclusive interview with the Bullion Desk late last week, Rogers discussed how most bull markets come with stages of consolidation and hindrances and the commodity market is really no different. Rogers noted that there have been corrections in equities between years 1982 and 2000 and there are parallels between the stock market then and the commodity market now.
“In 1987 stocks were down 40-80 percent worldwide and it took a long time for it to get above pre-correction levels but the bull market was not over,” said Rogers. “We are seeing the same normal correction happening in commodities now. But we have not seen enough supply come on stream yet in any commodities sector, except maybe iron ore or something like that, to bring supply and demand back in balance.”
Despite these points, Rogers still refuses to call a top in the commodity market. In fact, the bestselling author of “Hot Commodities” believes commodity prices will continue to rise in the months to come. However, investors should be cautious because commodities could possibly conclude in a bubble by the end of the bull market, which normally happens.
Nevertheless, the persistence of money printing by central banks all over the world will continue to assist in this market to soar. “Governments are still printing money and this has gone on for much longer than anyone expected, which could help fuel the commodities boom,” averred Rogers.
Agriculture is the best commodities pick to make and palladium is also another great investment to make since it’s in a “depressed” state right now, Rogers said. At the time of this writing, palladium is trading at just under $850. Over the past year, palladium has remained steady and has increase by approximately $100 in value.
Palladium prices have hit their highest levels since 2001 because of the mining strikes in South Africa, which commenced in January and have now become the longest running strikes in the nation’s history. Also, the strife in Russia is causing palladium prices to soar as well as the inventory deficits of palladium.
It is estimated that there will be a deficit of 1.6 million ounces this year, a number that was put forward even prior to the South African strikes. Demand persists for palladium because it is tied to the auto sector and production for gasoline engines.