Best of the Week
Most Popular
1.Putin’s World: Why Russia’s Showdown with the West Will Worsen - John_Mauldin
2. Stocks Bull Market Grinds Bears into Dust, Is Santa Rally Sustainable? - Nadeem_Walayat
3. Gold and Silver 2015 Trend Forecasts, Prices to Go BOOM - Austin_Galt
4.Gold Price Golden Bottom? - Toby_Connor
5.Gold Price and Miners Soar on Huge Volume - P_Radomski_CFA
6.Stock Market and the Jaws of Life or Death? - Rambus_Chartology
7.Gold Price 2015 - EWI
8.Manipulated Stock Market Short Squeezes to Another All Time High - The China Syndrome - Nadeem_Walayat
9.Gold, Silver, Crude and S&P Ending Wedge Patterns - DeviantInvestor
10.Is the Gold And Silver Golden Rule Broken? - Michael_Noonan
Last 5 days
Stock Market Happy Holidays - 27th Dec 14
Peace On Earth And Goodwill To All Men - 27th Dec 14
2015 Crude Oil Prices Won't Change the Emerging U.S. Dominance - 27th Dec 14
What’s Really Going on Inside the Latest GDP Number - 27th Dec 14
The Interview - 2014, The Year Propaganda Came Of Age - 27th Dec 14
Gold Miners Extremely Oversold as Tax Loss Selling Ends - 26th Dec 14 - Jordan_Roy_Byrne
Putin: It Is Time to Play Your Ace in the Hole - 26th Dec 14
A Gold Stocks Golden Opportunity On Hope’s Doorstep - 26th Dec 14
Russian Roulette: Taxpayers Could Be on the Hook for Trillions in Oil Derivatives - 26th Dec 14
Israeli Good Tidings for Palestinians - 26th Dec 14
Boxing Day Sales, Next, Debenhams... High Street Full List - 25th Dec 14
The Gold Price Target... Merry Christmas - 25th Dec 14
The Chinese Copper Elephant - 25th Dec 14
Santa Crushes Bears by Delivering Stock Market Rally to Dow 18,030 New Closing High - 24th Dec 14
Correcting Scrooge’s Economics - 24th Dec 14 - Ryan McMaken
Christmas Eve Online Sales, Boxing Day High Street Sales Full List - 24th Dec 14
Crude Oil, US GDP - You Thought The Saudis Were Kidding? - 24th Dec 14
Bank Capital Punishment and Other Nostrums - 24th Dec 14
The Biggest Unstoppable Market Trends - 24th Dec 14
In 2015 the U.S. Will Elbow OPEC Oil to the Sidelines - 24th Dec 14
U.S. Economic GDP Growth Revised Higher to 5% - 24th Dec 14
Crude Oil, US National Debt, and Silver - 23rd Dec 14
Make No Mistake, the Crude Oil Price Slump Is Going to Hurt the US Too - 23rd Dec 14
Twitter, the Only Social Media Stock Play I'm Recommending Right Now - 23rd Dec 14
Gold Price Outlook For 2015 - 23rd Dec 14
How to Prepare for the Super Convergence: the Bio-Info-Nano Singularity? - 23rd Dec 14
Stock Market Crash and High Yield Debt - 23rd Dec 14
Big Rally for Gold Junior Miners in January 2015 After Tax Loss Selling - 23rd Dec 14
Get Ready for the Gold Stocks Consolidation Wave 2015 - 23rd Dec 14
Could an Energy Bust Trigger QE4? - 23rd Dec 14
Will the Malaysian Economy Risk another Financial Crisis in 2015? - 23rd Dec 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Dramatic Stock Market Selloff

Jim Rogers Gold Price Forecast and the Agriculture Boom

Commodities / Gold and Silver 2013 Apr 18, 2013 - 04:40 PM GMT

By: Money_Morning

Commodities

Garrett Baldwin writes: In October, legendary Quantum Fund manager Jim Rogers made a prediction about gold prices that left many gold bugs shaking their head.

Although Rogers admitted he wasn't going to be selling his hard assets, he predicted further consolidation and a near-term correction in the metals markets.


Predicting this short-term downturn, Rogers cautioned that gold had been on the rise for twelve consecutive years, a streak that was unparalleled. That was then.

This week, his prediction rang true as gold and silver prices took another huge hit. In the aftermath, gold prices are now down approximately 30% since reaching an all-time high in August 2011.

According to Rogers gold prices have even further to fall.

"I have repeatedly babbled about $1200-1300/oz., but that is just because that would be a 30-35% correction which is normal in markets," he told Business Insider this week. "But I am a hopeless market timer/trader."

Rogers cites four key forces fueling the current gold sell-off:

■India raised its gold import tax from 4% to 6%, which has limited the demand for gold in the world's largest market for the metal.
■Technical analysts and chartists have been arguing that prices would fall.
■The collapse of the Bitcoin over the past two weeks coincides with many of the digital currency's owners also owning gold.
■Finally, Rogers believes Germany's demand that Cyprus sell part of its holdings in gold to alleviate debt concerns added to the sell-off.

Naturally, Rogers can bask in the moment. His gold call was right on the money.

But it's the second part of his October recommendation that deserves attention as well. Although it didn't receive as much fanfare as his gold call, Rogers nailed another one that day.

At the same time, he was warning on hard commodities like gold and silver, he also said there was a huge opportunity in agriculture and soft commodities.

Now for anyone who has been paying attention, the agriculture sector remains a prime area for growth in a world where glaring fundamentals point to serious problems on the horizon in keeping people fed.

A State of Concern for Global Agriculture Markets
In fact, Rogers has been on a one-man crusade to raise alarm bells about the deteriorating state of the agriculture industry and has issued a call-to-arms for more individuals around the United States to study agribusiness.

Although grain prices did slip this week during the sharp commodity sell-off, agricultural commodities remain far better positioned to recover in the near term. Aside from the obvious observation that investors can't "eat gold", grain prices are supported by far greater economic forces than hard metals. All of them point toward rising prices.

Rogers' basic thesis has been quite simple: Demand is far outpacing food supply, farmers continue to retire around the world, and global inventories and feed stocks are now hovering at historic lows.

Add in lingering concerns about last season's crippling drought and potential food shortages in the future, and it's easy to understand why corn was a top performing asset in the second half of 2012 and will likely remain so for the better part of the decade.

And it's not just investors pointing out why food prices are likely heading north.

According to the United Nations, the world population is set to grow to nearly 9 billion by 2040, up from 7 billion today.

But the real driver of food demand stems from rising global wages and a three-billion-person expansion of the global middle-class, which points to exponential growth in demand for food.

According to U.N. estimates, the world will require a 50% increase in food production, a 45% increase in energy, and a 30% increase in water. But while these problems might scare the average person, such concerns have long been alleviated by the agricultural sector's resilience and unrivaled ability to innovate in order to meet new challenges.

And there are more ways to make money off these trends than just buying farmland.

The Best Way to Play the Ag Boom
It's not just grain production that offers investors an opportunity to make money off the land.

The agricultural sector is highly consolidated with specialty firms that emphasize technological innovation in order to meet the booming rise in demand for food.

One company poised for strong growth over the next decade is Archer Daniels Midland (NYSE: ADM).

A global pioneer in commodity production and value-added services, ADM's stock is up 17.5% since the start of 2013 and currently pays a 2.36% yield. The company owns ADM Alliance Nutrition, a leading producer of livestock feed ingredients. And it's the animal nutrition industry that's taking center stage with meat demand on the rise.

Companies with expertise in animal nutrition will be critical players in servicing the booming Asian markets where dietary transitions and a rising middle class has led to an explosion in demand for pork and other meat products.

More than half of the world's pigs-approximately 476 million-are in China, and pork production is now so central to the Chinese diet, that the government has created a strategic pork reserve to accompany its strategic reserves of oil and grains

But for those just looking to enter agriculture based on the knowledge and enthusiasm of Jim Rogers, look no further than the Rogers International Commodity Agriculture ETN (NYSE: RJA).

The Index represents 20 agricultural commodity futures contracts, and is comprised of commodities consumed in the global economy. The index's largest allocations are dedicated to corn, wheat, cotton, and soybeans.

The index is poised to capture growth in the coming decade, as global demand is being predicated by emerged economies like Brazil and China.

No, you can't eat gold. But you can buy invest in a farm and capture profits as demand outpaces supply in the global agriculture markets.

If you’re one of the investors who got slammed as gold plummeted this week, don’t panic. We asked our trading expert Shah Gilani what’s next for the yellow metal in the following report: Investing in Gold: Here's What to Do Now

Source :http://moneymorning.com/2013/04/17/jim-rogers-prediction-on-gold-prices-was-only-half-of-the-story/

Money Morning/The Money Map Report

©2013 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014