Best of the Week
Most Popular
1.SNP Offers Labour Deadly Death Embrace Alliance, Holding England to Ransom, Destroy UK From Within - Nadeem_Walayat
2.Gold And Silver – Most Widely Used Currency In Western World? Stupidity - Michael_Noonan
3.Election Forecast 2015 - Coalition Economic Recovery vs Labour Collapse - Nadeem_Walayat
4.Election Forecast 2015 - Debates Boost Labour Into Opinion Polls Seats Lead - Nadeem_Walayat
5.Why are Interest Rates So Low? Ben Bernanke, Confused as Ever, Starts His Own Blog to Prove It - Mike_Shedlock
6.Leaders Debate Election 2015 - Natalie Bennett Green Party Convincing Anti-Austerity More Debt Argument - Nadeem_Walayat
7.Labour Economic Collapse vs Coalition Recovery - UK Election Forecast 2015 - Video - Nadeem_Walayat
8.China’s Stock Market Mania; How High can Red-chips Fly? - Gary_Dorsch
9.Gold and Misery, Strange Bedfellows - 31st Mar 15 - Dan_Norcini
10.Ed Miliband Debate Election 2015 Analysis - Labour Spending, Debt and Economic Collapse - Nadeem_Walayat
Last 5 days
Gold & Silver Alert: Silver Stocks’ Signal - 20th Apr 15
Now is the Time to Buy Resource Stocks, Especially Gold Equities - 20th Apr 15
DJ Transportation & Utility Averages Suggest Stocks Bull Market Is Over - 20th Apr 15
Crude Oil Price Bull Market Hope - 20th Apr 15
Stock Market Bears Get Slaughtered Despite Greece Counting Down to Grexit Financial Armageddon - 20th Apr 15
The Rise of the Paper Machines - 20th Apr 15
Gold and Silver Inflection Point - 20th Apr 15
SP500: A Butcher's Stock Market (Chop Chop Chop) - 20th Apr 15
Are Stock Market Bears Slowly Gaining Control? - 20th Apr 15
Sugar Commodity Price Bear Rally - 19th Apr 15
Avoid the Spread of the Stock Market "China Syndrome" - 19th Apr 15
Stock Market Going Nowhere Fast - 19th Apr 15
An Easy Way to Profit From the Two Biggest Trends in the Stock Market - 19th Apr 15
No Scripture Is Divine, Authentic and Beyond the Creation of the Human Brain - 19th Apr 15
Inflation, Central Banks, and Business Cycles - 18th Apr 15
Stock Market Correction May be Nearing End - 18th Apr 15
UK Housing Crisis, Immigration, Population Growth, Election Forecast 2015 - Video - 18th Apr 15
Q1 Corporate Earnings Risky for Stocks - 17th Apr 15
US Stock Market Getting Scarier by the Day - 17th Apr 15
Stock Market Watershed Day - 17th Apr 15
Gold Price Has “Hallmarks Of Market That Is Bottoming” - 17th Apr 15
Chinese Stock Market - Men Go Mad in Herds - 17th Apr 15
Two Stocks Offering Investors High Yields and Profits - 17th Apr 15
Gold Price Has “Hallmarks Of Market That Is Bottoming” - 17th Apr 15
Chinese Stock Market - Men Go Mad in Herds - 17th Apr 15
Two Stocks Offering Investors High Yields and Profits - 17th Apr 15
King Dollar Hurting Stock Market Corporate Earnings! - 17th Apr 15
Production Declines Hide Bigger Crude Oil Storage Issues - 17th Apr 15
Top Three Takeaways From Today’s OPEC Crude Oil Report… and How You Can Profit - 17th Apr 15
How to Profit from Australia's Healthiest Biotech Stocks - 17th Apr 15
What Is Really Driving Gold Price? - 17th Apr 15
Will Ever More Boomers Selling Retirement Assets Change Investment Prices For Decades? - 16th Apr 15
Won't Be Contagion with 'Grexit' Greece Euro-zone Exit - 16th Apr 15
Sharp Decline in USD/CAD and Its Consequences - 16th Apr 15
Blackstone is like Apple, Google, Hermes, Boeing - 16th Apr 15
The Most Dangerous Financial Headline I've Seen Since the 2008 Crisis - 16th Apr 15
Is Legal Tax Avoidance Extinct in the UK? - 16th Apr 15
Why Russia Will Send More Troops to Central Asia - 16th Apr 15
More Thoughts on the Current Crude Oil Market - 16th Apr 15
U.S. Treasury Secretary Warns Greek Exit Will Cause Enormous Disruption and Hardship - 16th Apr 15
The Hottest New Place to Find Stock Dividend Income in Q2/2015 - 15th Apr 15
How to Escape the Pensions Squeeze - 15th Apr 15
Water Crisis Game Changing Water Revolution - 15th Apr 15
The Drying of California - Corporate Farms Control of Water - 15th Apr 15
OPEC Going Broke, Dumping U.S. Dollars. Is That Good Or Bad? - 15th Apr 15
OPEC Just Confirmed It’s Losing the Oil War - 15th Apr 15
Four Uranium Companies Poised to Profit from the Growth of Nuclear Power - 15th Apr 15
Stock Investing Tread Softly… and Carry a Big Risk-Management Calculator - 15th Apr 15
Crude Oil Price Technical Outlook - 15th Apr 15
Important Bitcoin Price Action - 15th Apr 15
UK House Prices, Immigration, Population Growth and Election Forecast 2015 - 15th Apr 15

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

US Historic Bubble

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