Gold price plunges to 2-year low

Gold price plunges to 2-year low

All that glitters is still not gold for renowned commodities expert Jim Rogers, despite the precious metal plunging to its lowest price in two years on Monday.

The Singapore-based investment guru said gold remains ripe for a major fall and he is staying put for now.

"This may be the correction which gold needs... I'm still not buying," Mr Rogers told a media briefing on Monday on Singapore-listed Geo Energy Resources having a conditional agreement for a coal mine concession in East Kalimantan.

"I've not been buying gold because it needs a correction. Gold's only had one correction of over 30 per cent in 12 years, which is very unusual," he added.

Mr Rogers, who has been living in Singapore since 2007, joined Geo Energy as a non-executive director in December last year - his first board seat at a Singapore Exchange-listed firm.

Gold has undergone a dramatic fall in recent days and crossed into bear market territory on Friday, having plunged more than 20 per cent since a record close in September 2011, according to Bloomberg data.

Its short-term decline is almost as startling - down more than 10 per cent since it closed at US$1,581 (S$1,956) a troy ounce last week on Wednesday.

The price even dipped below US$1,400 during Asian trading hours on Monday - the first time it has sunk so low since March 2011.

Gold has been hit because investors are buying into an improved global economic outlook and snapping up riskier assets such as equities.

Several hedge funds and renowned investors such as billionaire George Soros have cut their gold exposure in recent months, while commodities analysts are tipping more price falls in the short term.

"If it goes down low enough, I'll start buying it again," Mr Rogers added, without identifying an entry level.

However, he said he remains bullish over gold's long-term prospects, expecting it to go much higher in the next decade or two.

In October 2009, Mr Rogers predicted that gold could cross US$2,000 in the next decade.

His attention is now on Geo Energy, which he said he joined as it has potential to expand.

On Monday, the company said it had entered into a conditional sales and purchase agreement to acquire what would be its fifth mining concession this year.

Mr Rogers said: "The proposed acquisition of the five upcoming mine concessions is in my opinion, proof of the group's capacity to sustain its growth momentum."

alfoo@sph.com.sg


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