By Michael Yoshikami
30-Sep (MarketWatch-TradingDeck) — Gold has dropped in price to around $1,600 per ounce and suddenly some say that gold is no longer a commodity that investors should embrace. I say ridiculous.

In times of panic, investors sell everything, even assets that have medium to long-term growth opportunities. The recent selling of gold was related to panic from hedge funds needing to raise money for redemptions as well as a tightening of margin requirements. This was not selling pressure based on any fundamental change in conditions or outlook.

Gold still makes sense in investors’ portfolios as a hedge against the fear and stagnation that very likely will occur over the next several years in the global economy. Affluence in China and India will continue to drive consumption, and despite the economic travails throughout the world, the desire for gold jewelry will continue to rise.

…It’s our view that sometime in the not-too-distant future, gold will reach $2,000 an ounce.

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