Sell bonds, take refuge in precious metals and rice: Jim Rogers

SHANGHAI: Investors should sell bonds and buy commodities like silver and rice as a “refuge” as the world economy may continue having problems, Jim Rogers, chairman of Rogers Holdings said.

“Bonds are not a good place to invest in. You should own commodities because that’s your only refuge,” said Mr Rogers, who predicted the start of the global commodities rally in 1999.

Gold has gained 8.3% this year, leading advances in precious metals, as investors seek haven assets to protect their wealth amid concerns that global economic recovery will falter. Still, commodities overall capped their worst quarter in more than a year on investors’ concern that slower growth from China to the US will sap demand.

The best place to be is in commodities and other natural resources, including precious metals like silver, platinum and palladium as supply shortages are already developing, said Mr Rogers, who co-founded the Quantum Hedge Fund in 1970.
Gold prices will rise to more than $2,000 per ounce, said Mr Rogers, without giving a time-frame. Bullion for immediate delivery declined 0.4% at $1,187.85 an ounce. It reached a record $1,265.30 on June 21.

While gold has been trading at an all-time high, silver remains 60 to 70% below its peak and is a better investment, he said. Silver reached an all-time high of $50.35 in New York in 1980. Silver for immediate delivery fell 1% to $17.6413 an ounce.

Platinum dropped 0.6% to $1,507.68 and palladium declined 1.2% to $433.35. Still, agricultural commodities are better than metals as prices are “very depressed,” he said, pointing to sugar which is 75% below its all-time high in 1974. Raw sugar for October delivery slid 1.2% to 16.49 cents a pound on ICE Futures US in New York. It reached a record of 66 cents in November 1974.

“Not many things are 75% cheaper that 36 years ago, but that’s true of sugar,” Mr Rogers said. “Agriculture commodities are desperately cheap compared to 20, 30, 40 years ago.”

Rice futures on June 30 touched $9.55, the lowest price since October, 2006, on rising production and declining demand. The contract for September delivery gained 0.7% to $9.935 per 100 pounds on the Chicago board of trade in Shanghai.