All Parabolic Moves End Badly

Business Intelligence Middle East      

Legendary global investor and chairman of Singapore-based Rogers Holdings, Jim Rogers warned that if silver continues to go up like it has been over the past 2 or 3 weeks and reaches triple digits in 2011, he will probably start to think about selling because then ‘you’ve got a bubble’.

Speaking to Financial Survival Radio, Rogers said: " My hope is, silver and gold and all commodities will continue to go up in an orderly way for another ten years or so, and eventually the prices will be very, very high".

"I hope something stops it going up in the foreseeable future and we have a correction," he added.

Explaining his wish, Rogers warned that "a parabolic move and all parabolic moves end badly".

Most investors don’t notice something until there’s a good, nice bull market in place, such as with gold and silver, he said, adding after ten years of price rises in gold, people are starting to notice.

"Eventually, everybody’s going to be owning gold, and then we’ll all have to sell our gold. But that’s a long way from now, he predicted.

The legendary investor doesn’t consider the recent increases in precious metals as parabolic.

"If silver continues to go up like it has been over the past 2 or 3 weeks, yes, then it would get to triple digits this year. And then we’ll have to worry. It’s not parabolic yet".

"There’s never one in history that hasn’t popped," he noted.

The price of gold bullion jumped above US$1500 per ounce on Wednesday, setting new Dollar and Sterling highs but falling sharply against the Euro as the single currency rose to its highest level since 2009.

"Silver prices remain very strong, but seem to have run ahead of the fundamentals," says bullion bank Scotia Mocatta’s latest Metal Matters monthly.

With silver setting its 8th new 31-year high in 13 trading days so far in April, "If gold corrects expect silver to follow," says Scotia. "Longer-term [gold] investors generally seem comfortable to hold their existing positions…[yet] the level of interest is low considering how much uncertainty there is in the market and how weak the dollar has been."

Rogers advises watching the dollar and the price action in deciding when it is time to exit precious metals.

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Jim Rogers has taught finance at Columbia University’s business school and is a media commentator worldwide. He is the author of Adventure Capitalist, Investment Biker, Hot Commodities, A Gift to My Children, and A Bull in China. See his website.