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Cramer: Does Gold Still Belong in Your Portfolio?

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With gold making its worst 2-day drop in 30 years, there's a good chance you're rethinking your position in the precious metal.

If you're currently long, the decline smarts. Over two days gold has dropped well over 10%. And that's in addition to the slower decline that's been underway since late last year.

Yet, despite the decline, Jim Cramer still believes that gold belongs in every portfolio.

"I have liked gold since $800 and I continue to like it if you don't have any," Cramer said on Monday's broadcast.

Largely Cramer advocates a long position in gold because he sees it as an important hedge – against things like inflationas well as unexpected developments.

"You need to have something to offset the printing presses of the central banks," he said. And, "You need the insurance gold give you against the potential for an unexpected catastrophe in common stocks," which in turn would generate a flight to safety.

Kerem Uzel | Bloomberg | Getty Images

In other words, goldprovides balance to a portfolio and Cramer doesn't think the recent decline changes that dynamic. If anything he believes concerns about holding gold are short-term issues.

"Right now, many hedge funds have speculative positions in gold," he explained, and for somewhat complex reasons, they need to sell now.

On top of that, there are concerns that Cyprus and other nations struggling with financial woes may sell gold onto the market to ease the burden of austerity. That too has triggered gold selling ahead what could be a massive supply coming on to the market.

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But at the end of the day, Jim Cramer believes the catalysts driving gold lower will subside and it will again attract buyers for the reasons outlined above.

If you're an investor with a longer time horizon, "My advice is to have a position in gold. I am not changing that," Cramer said. "If you hold no gold, on this dip I'd buy some."

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