With gold prices being hammered in recent weeks, and trading near four-month lows on Wednesday, longtime gold bull Jim Rogers is sounding a word of caution, saying it’s possible the correction in bullion may continue into the new year.
“Just be careful, there’re too many bulls, including me, but I’m very cautious,” Rogers told CNBC.
“Gold is having a correction— it’s been correcting for 15-16 months now— which is normal in my view, and it’s possible that [the] correction is going to continue for a while longer.”
Gold prices have been gaining for over 12 straight years now, Rogers noted, adding that the safe haven asset has only seen a major correction once in that time period, during the global financial crisis back in 2008 when bullion fell 32 percent.
“Most things correct 30 percent every year or two, even in big bull markets – 30 percent corrections are normal and yet gold has only done that once in the past 12 years,” Rogers said. “Gold on any kind of historic market basis is overdue for a nice correction.”
Gold regained some strength on Wednesday after falling to its lowest level since August in the previous session of $1,661.01. Analysts said the progress in U.S. “fiscal cliff” talks has dented gold’s safe haven appeal, as investors turn to equities.
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