Commodities guru Jim Rogers said he is not buying gold. In fact, he said he has "hedged himself" since we spoke to him last month.
Rogers said he expects gold prices to fall further and believes they could tumble 40-50 percent off their top if India were to stop its gold imports or if Europeans were to sell their gold:
"There's some movement in India to really curtail the purchase of gold. Some people in India say we should stop importing gold period which would be draconian.
There are also Europeans who are talking about the need to sell their gold or at least to start offering gold backed-convertible bonds, bonds convertible into gold, which would be a way to free up their central bank holdings without dumping gold.
JP Morgan who knows what, they're having to liquidate a lot of things, and who knows what and where. There are things going on that could cause gold to go ahead and have a nice reaction which I have been anticipating.
...There's an element in India in the last several months which is very strongly saying we've got all this money tied up in gold which is not good for the economy. If we could just get the money into circulation instead of locked up on Indian wives or Indian vaults it would be good for the economy. And there's also a huge group saying that one of the big reasons we have this huge balance of trade deficit is because we buy all this gold and put it in the closet. Let's stop that. Now if they did that it would be devastating for gold. Gold would certainly go down 40% - 50% from its top. I doubt they would do anything that dramatic that quickly, if Europeans suddenly said they were going to dump their gold, or if they were forced to, that too would put a big drop on gold."
Rogers said gold has had one only major correction since 2001 and it would be normal and good if gold prices fell.
Don't Miss: The Truth About Gold >
More From Business Insider