Commodities bull Jim Rogers has admitted he is worried that silver might go “parabolic” and crash later this year. The 69-year-old investor remains confident that gold will continue to rise but says that if silver continues to rise at its recent rate, “you’ve got a bubble”.
Rogers is well known for attracting press attention, famously moving his family to Singapore because Asia is “how Europe used to be”. However, investors will particularly interested in his view on silver as he has made several well-timed calls on commodities in the past.
Rogers made his name by co-founding the Quantum Fund with George Soros in the ’70s but it was the launch of his first resource fund in 1998 – which benefitted from rising commodity prices in the following decade – that established him as a ‘commodity guru’.
Speaking to a US radio station, Rogers acknowledged that “people are starting to notice gold” but remains confident that gold has plenty to rise. “Eventually everybody’s going to be owning gold, and then we’ll have to sell our gold. But that’s a long way from now.”
He denied that recent purchases by institutional investors, such as Texas University, marked the top of the market. “Gold’s been going up for ten years in a row. I’d hardly call this a tipping point.”
Rogers, however, was a little more cautious on silver. He noted that it has been “skyrocketing” recently and warned that if it hit $100 or more (it’s currently trading at around $45 an ounce) this year, he “would probably start to think about selling”.
On the one hand, “maybe the US dollar is going to become confetti in 2011, and if that’s the case and silver goes to $150, then obviously I wouldn’t sell my silver.” But if silver “goes parabolic” this year without an accompanying currency collapse, “I would be very worried.”
Recalling how he had begun to short gold when it “went parabolic in 1980” he reminded listeners that “there’s never one [a bubble] in history that hasn’t popped”.