Best of the Week
Most Popular
1.Election Forecast 2015 - Opinion Polls Trending Towards Conservative Outright Win - Nadeem_Walayat
2.UK Solar Eclipse - End Time Sign, Judgement Day, Doomsday! - Nadeem_Walayat
3.Gold And Silver - When Will Precious Metals Rally? Not In 2015 - Michael_Noonan
4.Preparing for the Next Stocks Bear Market - Forecast 2015-2016 - Gary_Savage
5.Is a Stock Market Crash Imminent? - David Eifrig
6.Gold Price Slumps as US Dollar Soars, What's Next? - Nadeem_Walayat
7.US Dollar Forex Pairs and Gold Chartology - Rambus_Chartology
8.Election Forecast 2015: The Day Labour Lost the General Election - Nadeem_Walayat
9.The ECB Should End QE Next Month - EconMatters
10.Silver Price Poised to Surge - Zeal_LLC
Last 5 days
David Cameron Election 2015 Debate Facts Check - Employment, Immigration, Debt & Deficit - 29th Mar 15
Stock Market About Ready to Crash! - 29th Mar 15
Reflections in a Golden Eye - Gold Market Rejection, Repatriation and Redemption - 28th Mar 15
Stock Market Inflection Point - 28th Mar 15
Gold And Silver - What Moved Price? Bab el-Mandeb And Uranus Square Pluto. What?! - 28th Mar 15
Stock Market Investment Parachutes; Do You Have Yours? - 28th Mar 15
Peak Gold Misunderstanding, is Gold About to Run Out? - 28th Mar 15
Deflation Watch: Key U.S. Economic Measures Turn South - 27th Mar 15
The Hard-Earned Truth About Recreational Real Estate - 27th Mar 15
Bitcoin Price Still in Important Territory - 27th Mar 15
Stocks Bear Market Conditions - Index Market Range Warning - 27th Mar 15
BEA Leaves Q4 2014 U.S. GDP Growth Essentially Unchanged at 2.22% - 27th Mar 15
Brazil Economy Victim of Vulgar Keynesianism - 27th Mar 15
Gold to Fuel Silver Price Upleg - 27th Mar 15
Gold and Silver Stocks Will Rise Again! - 27th Mar 15
Risk of ‘World War’ between NATO and Russia on Ukraine as Yemen Bombed - 27th Mar 15
FOMC Minutes Turned The Gold Tide - 27th Mar 15
Sheffield Hallam Election Battle 2015 - Lib Dems Go to War Whilst Labour Sleeps - 27th Mar 15
Gold Effect On Mining & Shale Wasteland - 27th Mar 15
How Stock Investors Should Play the 2016 Presidential Race - 26th Mar 15
MidEast Energy Alert: Why the Crisis in Yemen Could Get Ugly Very Fast - 26th Mar 15
Stock Market Downward Spiral of Dumbness - 26th Mar 15
The Monetary Approach Reigns Supreme - 26th Mar 15
Stock Market Large Gap Down, Despite the Algos' Push Back - 26th Mar 15
Crude Oil Surges, Gold price Spikes as Middle East Tensions Escalate - 26th Mar 15
The U.S. Housing Market Recovery Is Fabricated Optimism - 26th Mar 15
Why Yemen Is The Next Saudi-Iranian Battleground - 26th Mar 15
The Crude Oil Price Crash and China Economic Slow Down - 26th Mar 15
Global Financial Markets Are More Distorted Than Ever Before - 26th Mar 15
One More Stock Market Rally and Then a Huge Drop Expected - 26th Mar 15
Danger Will Robinson - Stock Market Crash Warning - 25th Mar 15
Learn the Basics of Corrective Elliott Waves - 25th Mar 15
Why CNBC Is Hazardous to Your Financial Health! - 25th Mar 15
Will Your Retirement Accounts Survive The Coming Tax Code "Revolution"? - 25th Mar 15
US Dollar - Americas Phoenix - 25th Mar 15
California’s Epic Drought: Only One Year of Water Left! - 25th Mar 15
What’s Wrong With Silver? - 25th Mar 15
SPX Futures Appear Weak. WTIC and Gold May Be at Max Retracement - 25th Mar 15
We’re at the Dawn of a “New Energy Age” - 25th Mar 15
A Very Weak U.S. Economic Recovery - 25th Mar 15
Zero UK CPI Inflation Rate Prompts Deflation Danger Propaganda For Fresh Money Printing - 25th Mar 15
Stock Market NYSE Hi-Lo Index Aggressive Sell Signal - 24th Mar 15
Palladium Commodity Price Forecast - 24th Mar 15
Bitcoin Price Gearing Up for a Fall - 24th Mar 15
Safety Deposit Boxes In UK Being Closed By ‏HSBC – Not Closing Gold Vaults - 24th Mar 15
Japan Short Term Gains And Long Term Disaster - 24th Mar 15
China's Fragile Evolution - 24th Mar 15
David Cameron Announces Resignation Even Before Being Re-elected, Handing Labour 6 Seats - 24th Mar 15
City of London's Ownership of American Colonies - 24th Mar 15
Stock Market Reversal May Have Begun - 24th Mar 15
Casey Gathers Top Gold Experts to Share Secrets for Making Money in Any Market - 24th Mar 15
Thoughts on The Current Crude Oil Market - 24th Mar 15
U.S. Economy Still on Life Support - What Your Governments Hiding From You... - 24th Mar 15
UK Election Forecast 2015 - Budget Bribes Fail, SNP Insurgency Catastrophe - Video - 24th Mar 15
Is Stock Market Minor Top Taking Hold? - 23rd Mar 15
Greece and EU Running Out of Time as Bank Runs Intensify - 23rd Mar 15
Stock Market Slightly Negative Expectations Following Last Week's Rally - 23rd Mar 15
This Rising Interest Rates Play Could Make You a Quick 55% - 23rd Mar 15
Platinum Commodity Price False Break Low - 23rd Mar 15
The Real Reason The American Dream is Unraveling - 23rd Mar 15
Election Forecast 2015 - Budget Bribes Fail to Impress Voters, Tory's Lose Seats in Opinion Polls - 23rd Mar 15
Silver Price Reliance During U.S. Dollar Rally - 23rd Mar 15
old Price Outlook Dramatic Improvement Following US Dollar Topping Action - 23rd Mar 15

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

US Economy Still on Life Support

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

© 2005-2015 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