DECLINE IN COMMODITIES ARTIFICIAL: JIM ROGERS
Gold prices are lower heading into Thanksgiving on profit-taking and a stronger dollar. In addition, the expiration of options on gold futures on Tuesday kept gold prices under pressure. "The bullish factors for gold haven't really disappeared, it's more positioning pushing it down,” said Robin Bhar, analyst for Credit Agricole. Gold is currently on track for a near-20 percent gain for 2011, its eleventh consecutive yearly increase. According to Rueters, “Holdings of gold in exchange-traded funds backed by physical metal have risen by more than a million ounces in the last week.” (Reuters, 11/23/11)
U.S. equities are plunging on Eurozone fears and a lackluster report showing that Chinese manufacturing output dropped to the lowest level since March 2009. Also weighing on investor sentiment was the latest report which showed the number of people filing for initial unemployment benefits rose 2,000 in the latest week to 393,000. Meanwhile, personal income climbed 0.4% in October while personal spending grew 0.1%; analysts had expected both measures to rise 0.3%. (CNN Money, 11/23/11)
Renowned investor Jim Rogers told CNBC today that the recent decline in commodities is artificial and has everything to do with the collapse of brokerage firm MF Global. "With MF Global going bankrupt – which was a gigantic commodities firm – there was a lot of artificial forced liquidation of commodities. People have to sell whether they like it or not. It's artificial selling right now," Rogers told CNBC. Rogers went on to say the drop isn’t surprising. "This happened before in 2008, when Lehman and AIG went bankrupt, they were both huge in commodities and everybody had to sell," he said. Rogers remains bullish on commodities and believes gold prices will continue to reach new highs whether the global economy improves or not. "I'm long commodities and currencies, because if the world gets better, the shortages in commodities will make sure I make money; if the world economy doesn't get better, I'd rather own commodities because they're going to print money," he said. (CNBC, 11/23/11))
†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.
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