Gold prices tanked 11 percent so far in September, shaking the confidence of some investors and observers. “Gold is not a safe-haven asset” and “gold is no longer a one-way bet” are common recent exclaims.
True gold bulls, however, aren’t shaken by the decline.
Most cite the belief that the Federal Reserve will continue to print money and a general distrust of fiat currencies. Rogers agrees with those beliefs.
Moreover, he cites historical prices as evidence.
He said in the 1970s, gold rallied 600 percent, then dropped 50 percent (“scared everybody off” by doing so), and then went on to rally another 850 percent.
He also said oil prices declined 50 percent three times since the bull market began in 1999.
Rogers is right that gold, which has essentially “gone up ten years in a row,” has behaved unusually for any asset, so much so that it earned the monikers of “one-way bet” and “safe-haven asset.”
Gold, as September’s drop proved, isn’t any of that.
Its rally, however, remains intact, said Rogers.
Gold hit a nominal high of $1,923 on Sept. 6 2011. However, it’s still off from its inflation-adjusted all-time high of nearly $2,400 on Jan. 21 1980.
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