The gold selloff could last for several weeks, months maybe, which is normal after a 10-year rally but investors shouldn't ditch the asset altogether but buy amid price dips, says international investor Jim Rogers.
"Gold has been up 10 years in a row, which is very unusual in any asset class. So if it is up this year or 11 years in a row, gold is overdue for a correction and it could have a nice substantial correction given that it has been so strong," Rogers tells the Economic Times.
"I doubt if it will go to $2,000 an ounce in 2011, it is more likely to have a correction which will last for several weeks, several months," he said.
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"It has been very strong. If it goes down some more, I would buy more gold."
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Gold — now trading around $1,630 an ounce — has been falling in part on fears that Greece could default and spark on run on European banks, which could bruise the euro and fuel demand for the dollar, a safe haven amid market turmoil due to its liquidity.
"It shows you that at times of extreme stress, there is not a suitable substitute to liquidity and although gold is liquid by metal standards, in comparison to Treasurys, when you get this kind of flight to cash, then it really is cash that counts and that means U.S. dollars," says Credit Suisse analyst Tom Kendall, according to Reuters.
"The markets are going to continue to react this week to the political situation within Europe, and I don't see any quick resolution or stimulus coming to the markets."
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