Among other factors weighing on gold are a lack of more quantitative easing from the
and the need for cash as the European sovereign debt crisis drags on.
"Some investors, institutions, and banks have had to liquidate profitable gold positions in order to meet escalating margin and liquidity calls," said Brian Hicks, co-manager of the U.S. Global Investors Global Resources Fund, something that could only get worse headed into the end of the year.
Frank Holmes, CEO of U.S. Global Investors, thinks this week's carnage is a buying opportunity.
"People get so caught up with the next three minutes for gold and they should really be focused on the next three years. It's a non-event for gold to go plus or minus 15% over a 12 month period," Holmes said. Over the past 10 years gold has, on average, risen 17% annually. Despite this week's selloff, gold is still up 12% for the year.
Holmes said the dollar is the least bad currency of choice right now but at the end of the day it has lost 80% of its purchasing power since 1971 and that factor will help support gold long term.
"I still think gold prices have the ability to double over the next five years which would out us around $3,600 an ounce," he said.
Gold mining stocks
were climbing higher Thursday.
was popping 2.48% at $11.98 while
was adding 1.94% at $14.18. Other gold stocks,
were trading higher at $36.87 and $14.84, respectively.
Written by Alix Steel in
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