Gold prices have fallen by around 18 percent since peaking above $1,920 an ounce in late 2011, but a shrewd investor will hold onto the precious metal, says famed commodities bull Jim Rogers, CEO and chairman of Rogers Holdings.
The yellow metal has been climbing every year for over a decade, and corrections are normal.
"Gold has gone up eleven years in a row and it is consolidating right now. I have not sold any gold, I still own my gold," Rogers tells Newsmax.TV in an exclusive interview.
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"If it goes down, I hope I am smart enough to buy more, and I hope I am smart enough to buy more silver, because precious metals are going to make a lot of money for a lot of people in the next decade."
Gold has done well thanks to excessive debts and loose monetary policies that have weakened paper currencies.
Since the downturn, governments have spent heavily pumping up their economies, while central banks have flooded their financial systems with liquidity to encourage investment and hiring.
Gold prices could plunge should the European debt crisis intensify, such as messy Greek or Spanish default and withdrawal from the eurozone.
Such a scenario would send gold on fresh declines as investors run to the metal's traditional hedge, the U.S. dollar, but bargain hunters will snap the metal right back up.
Translation: Gold is headed up either way, especially if weak economies prompt central bank to continue stimulating their economies.
"If Spain suddenly goes bankrupt out of the blue, everything is going to collapse ... to $1,300 or $1,200 if it goes that low, and I hope I am smart enough to buy a lot more," Rogers says.
Don't expect the U.S. or any other major government to adopt a gold standard, which sets the value of a paper currency to a specified weight in gold.
"I think it's unlikely. I know there are lots of people who would like to return to the gold standard, but the problem with the gold standard is that it always had problems, too. Politicians can always figure out ways to try and cheat us, the poor citizens," Rogers says.
The U.S. abandoned the gold standard in the 20th century, but calls for its return are back in wake of the inflationary fears that loose monetary policies have stoked.
"If the world's currencies collapsed next week or next year, I am sure the people grab for gold because they know nothing else. But I don't think that's going to happen any time soon."
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