He also expects gold to revisit all-time high levels, as soon as the ongoing phase of weakness subsides.
“I am not buying gold and silver now, as this correction may go on for a while. But gold will surely make new all-time highs. Silver is down 50 per cent, and I believe, it will at least double when the bull market resumes. When people lose confidence in governments and currencies, they always go to gold and silver,” Rogers told ETNOW in an interview.
Calendar 2020 turned out to be a good one gold and silver, with the white metal rising nearly 50% and the yellow metal 25%. At over $20 an ounce, the average silver price in 2020 stood at the highest level since 2013. It is projected to hit $27 an ounce in 2021. But the bullion has been rangebound so far and ended April in the red.
Gold prices have jumped this month to hit the highest level since February. The precious metal tends to do well in an inflationary environment, the signs of which are already showing in major economies like the US.
He said commodities could do very well when stock markets enter a bear phase, probably in the next one or two years.
Rogers, author of Street Smarts: Adventures On the Road And In the Markets, said commodities are the only asset class that are cheap on a historical basis right now. “If one wants to invest in commodities now, she should be looking at silver and sugar as they have not moved much,” he said.
“Fundamentals of commodities are probably sound, but they have all been going straight up. When things go straight up, they usually correct for a while. Silver is up a lot but it is still down 50 per cent from its all time high. Sugar is a disaster from its all-time high. So, some of these commodities are still probably okay to look at. But be careful of the ones that have gone straight up, including copper,” he said.
Rogers said he is long on nearly all commodities and expect them to go up for several years.
“Oil is down 50 per cent from its all-time high. There is still a lot of upside left in commodities. I have no idea when it will happen. Stocks are not in a bear market, but I expect them to be in there sometime in the next year or two. Commodities could very well go higher during the bear phase of the stock market, because people will be worried about inflation and commodities are seen as inflation hedges, and rightly so,” he said.
Rogers said US President Joe Biden has talked about huge spending on infrastructure, which might replace Chinese demand for metals, if it slows down going ahead.
“The whole world is looking to spend on infrastructure, rightly or wrongly. I would not give up on infrastructure spending as yet,” he said.
He said demand for metals will go up as the world shifts to electric vehicles. He believes a shift to EVs would lead to increase in usage of copper, iron and lithium.
He said Bitcoin and other cryptocurrencies might have peaked in terms of prices.
Many of them, including Bitcoin, might have peaked and are in a bubble zone. “Bubbles always pop. I have no idea when this bubble will pop,” he said.
“If you are good at trading why not try Bitcoin, at least until something changes and central banks make it illegal or something. I would not be trading them now, there has been too much of a bubble there,” he said.
Bitcoin has tumbled all of this week, erasing all the gains it had notched up following Tesla’s Feb. 8 announcement that it would use corporate cash to buy the digital asset and accept it as a form of payment for its vehicles.
The world’s largest cryptocurrency has dropped roughly 40% from its record of almost $65,000 and traded around $39,360 in London early Wednesday.