Investor Jim Rogers Says Gold Needs Correction, Isn’t Buying Yet as it hasn’t dropped enough; Indians Defer Gold Purchases, Betting Bear Market Set to Deepen

Investor Jim Rogers Says Gold Needs Correction, Isn’t Buying Yet

Gold, which tumbled into a bear market last week, is in need of a correction, according to investor Jim Rogers, who said that he’s not buying the commodity yet as it hasn’t dropped enough. “This may be the correction that gold needs,” said Rogers, chairman of Rogers Holdings. “If it goes down enough, I will start buying it,” Rogers told reporters in Singapore today, without identifying a level. Gold extended losses to the lowest level in two years today after investors cut holdings in exchange-traded products as the U.S. recovers. Rogers, who foresaw the start of a commodity rally in 1999, has previously backed bullion to rally as central banks boosted their balance sheets to stimulate growth. Bullion for immediate delivery fell as much as 3.9 percent to $1,425.75 an ounce and was at $1,436.10 at 3:55 p.m. in Singapore. Prices tumbled 5 percent on April 12, taking losses to more than 20 percent since the record close in September 2011 and meeting the common definition of a bear market. Rogers said in April 2006 that a boom in energy and raw- material prices would help drive gold to a then-record $1,000, without giving a timeframe for that forecast. In July 2007, Rogers said that he wasn’t selling his gold position even though there were too many speculators backing further gains. In October 2009, Rogers said that gold may top $2,000 in the next decade, citing the printing of money. In August 2011, Rogers said while he wouldn’t buy more gold “right now,” the metal was still poised to rally to $2,000 “over the years.”

To contact the reporters on this story: Chou Hui Hong in Singapore at chong43@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net

Indians Defer Gold Purchases, Betting Bear Market Set to Deepen

Gold buyers in India, the world’s biggest consumer, are delaying purchases in a bet that the bear market in bullion will deepen, according to the All India Gems & Jewellery Trade Federation.

“People are expecting prices to drop more as the sentiment in the market is weak and selling pressure remains,” Chairman Haresh Soni said in a phone interview from New Delhi. The price volatility is discouraging buyers, he said. The federation represents about 300,000 jewelers nationwide.Gold, which entered a bear market last week, extended a plunge today to the lowest level since March 2011 on speculation that demand for haven assets will contract as the global economy improves. Bullion may slump to as low as 26,000 rupees ($476) per 10 grams by June after tumbling to the lowest since October 2011, according to Kotak Commodities Services Ltd. Consumers will wait for prices to stabilize, said Rajesh Mehta, chairman of Rajesh Exports Ltd. (RJEX)

“Buyers are watching the price movements closely and will purchase more if they decline further,” Mehta said by phone from Bangalore. Sales rose an average 60 percent to 70 percent in the past three to four days, he said.

Futures on the Multi Commodity Exchange of India Ltd. (MCX) fell 6.2 percent last week, extending losses this year to 14 percent. The June-delivery contract slid as much as 5.5 percent to 26,400 rupees per 10 grams today and was at 26,645 rupees at 2:36 p.m. in Mumbai.

Gold Plunge

The slump will help curb India’s record current-account deficit, provided imports stay the same, said Soni from the jewelry federation. The deficit, the broadest measure of trade, swelled to $32.6 billion in the quarter ended Dec. 31, or 6.7 percent of gross domestic product, stoked by gold and oil imports and subdued exports.

Gold for immediate delivery fell as much as 5.3 percent to $1,404.05 an ounce, and traded at $1,410.60. Prices tumbled 5 percent on April 12, taking losses to more than 20 percent since the record close in September 2011, and meeting the common definition of a bear market.

Prices in India may fall below 27,000 rupees per 10 grams before the buying festival of Akshaya Tritiya on May 13 and extend declines if the rupee gains, Dharmesh Bhatia, a vice president of research at Kotak, said by phone from Mumbai.

Gold is bought during festivals and marriages as part of the bridal trousseau or gifted in the form of jewelry by relatives. The festival season in India runs from August to October followed by the wedding season from November to December and from late March through early May.

Demand for gold will remain strong because of weddings and festivals, Somasundaram P.R., managing director for India at the World Gold Council, said in an e-mailed statement today.

“Consumers have been resilient to price movements, looking forward to periods of price stability, when they build gold purchases into their household budgets,” he said.

To contact the reporter on this story: Swansy Afonso in Mumbai at safonso2@bloomberg.net

Calpers Commodity Holdings Dropped 4.1% in February to $1.279B

The California Public Employees’ Retirement System, the largest U.S. pension fund, reported the value of its commodity holdings slipped 4.1 percent in February from the previous month.

The fund held $1.279 billion in commodities as of Feb. 28, the most-recent data available, or 0.5 percent of the total assets listed at $254.997 billion, according to a monthly report posted on the fund’s website before today’s investment committee meeting. That’s down from $1.334 billion on Jan. 31, or 0.5 percent of total assets of $254.887 billion.

The fund’s board is meeting today, tomorrow and April 17, according to the Calpers website.

To contact the reporter on this story: Elizabeth Campbell in Chicago at ecampbell14@bloomberg.net

Gold Miners Plunge Most Since 2009 as Metal’s Price Drops

Gold producers including Barrick Gold Corp. (ABX) fell the most in four years as the metal slumped below $1,400 an ounce to a two-year low after dropping into a bear market last week.

The 54-company Standard & Poor’s/TSX Global Gold Sector Index (SPTSGD) plunged as much as 8.4 percent, the biggest intraday decline since March 10, 2009. Barrick, the biggest producer by sales, fell 9.1 percent to C$20.85 at 10:19 a.m. in Toronto, where the company is based, while Goldcorp Inc. (G), the second- largest Canadian gold miner, dropped 5.4 percent to C$28.45. Newmont Mining Corp. (NEM), the biggest U.S. producer, fell 6.4 percent to $34.03 in New York.

Gold futures in New York fell 7.2 percent to $1,393.20 an ounce at 10:22 a.m. as optimism that a U.S. recovery will curb the need for stimulus cut demand for a protection of wealth. Gold earlier fell as much as 7.8 percent to $1,385 an ounce.

Gold futures fell 4.1 percent on April 12, taking losses to more than 20 percent since the record close in August 2011 and meeting the common definition of a bear market.

Gabriel Resources Ltd. (GBU), which is seeking to develop a gold mine in Romania, fell as much as 23 percent after John Hayes, a Toronto-based analyst at BMO Capital Markets, cut his rating on the shares to underperform, the equivalent of sell. Detour Gold Corp. (DGC), the operator of the Detour Lake mine in Ontario, fell as much as 18 percent.

There’s “a moderate probability that Barrick could trigger a single-notch credit-rating downgrade” if gold prices stayed at $1,400 from the second quarter of this year through 2015, Stephen Walker, Dan Rollins and Sam Crittenden, analysts at RBC Capital Markets, said in a note today.

“We would expect the company to draw down its existing credit facilities, consider cash saving measures and seek new debt financing in order to complete the existing capital spending programs,” at $1,400 an ounce gold, the RBC analysts said.

To contact the reporter on this story: Liezel Hill in Toronto at lhill30@bloomberg.net