Jim Rogers: Gold Will Surge if Stock Market Declines

On Wednesday, August 7, veteran American investor Jim Rogers predicted a substantial rise in gold prices if the global stock market crashes in the upcoming months. He emphasized that during periods of market volatility, investors tend to favor gold for its safe haven qualities. Speaking with Business Today TV Managing Editor Siddharth Zarabi, Rogers advised investors to hold onto their gold, suggesting that its value could increase significantly in the near future.

Rogers noted, "Gold prices have been down for many years. Recently, they have begun to rise. When a long-static commodity starts to move, it often gains momentum. That’s what’s happening with gold now. The momentum is building, and it’s uncertain how high the prices will go." Check Gold Price In India for Today

He further added, "I foresee escalating problems in the equity market in the coming months. During such times, many people will turn to gold and silver for protection. I’m not selling my gold and silver; in fact, if the prices drop, I’ll buy more."

Gold prices have experienced a notable surge in 2024, reaching a record high of over ₹73,000 per 10 grams, marking an impressive 21.1% increase within a year.

Given the global political and economic instability, gold has recently become a favored asset among investors, seeing a significant rise in value. This surge has been driven by factors such as Russia's military actions in Ukraine and the ongoing tensions between Israel and Palestine. However, the sustained appreciation, pushing gold prices to over $2,400 an ounce, is largely influenced by China's economic activities.

Discussing central banks' gold purchases, Rogers indicated that their actions signal caution. "Central banks usually sell gold for their own use. If they are buying instead of selling, it might suggest they anticipate financial market turmoil."

A report by the World Gold Council (WGC) highlighted that central banks' gold purchases surged to 1,000 tons in 2022, doubling the annual average of 500 tons seen in recent years, with this high level of buying continuing through 2023.

The Reserve Bank of India (RBI) increased its gold reserves to 822 trillion, the highest ever for any quarter, purchasing 8.7 tons of gold in January 2024, the largest acquisition since July 2022. According to the WGC, RBI's gold holdings rose from 803.58 tons in December 2023 to 812.3 tons in January 2024.

RBI resumed gold acquisitions in 2018, after a significant 200-ton purchase in 2009 during the global financial crisis. Over the first ten months of the current fiscal year, RBI has boosted its gold reserves by approximately 17.7 tons.

On Wednesday, gold prices remained stable as market participants awaited new signals from U.S. Federal Reserve officials regarding potential interest rate cuts. Spot gold held steady at $2,314.29 per ounce as of 0037 GMT, while U.S. gold futures dipped 0.1% to $2,322.90. A year ago, spot gold was trading at $2,000 per ounce. Check Gold Futures 4-Oct-2024 

In India, gold prices on the MCX were around ₹71,163 per 10 grams on Wednesday, with an intraday low of ₹70,901.