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Gold is about to see a comeback: RBC’s Gero

Gold recently tumbled to five-year lows. But according to one strategist, the precious metal isn't going to stay down for long.

"With all the bears in the woods, everybody [being] bearish is probably the most enticing reason to start to pick at the market," George Gero said Tuesday on CNBC's "Futures Now."

Gero, a precious metals strategist at RBC Capital Markets, said Monday's 2.2 percent selloff in gold was sparked by one large trade, rather than any sea change in the fundamentals.

"Somebody had to make the decision to be out of the market with that size trade, which distorted the markets," he said. "We will be going back in the next few months to basics."

Gero has a price target of $1,230 on gold by the end of the year, which he shares with survey participants from the International Precious Metals Institute. Along with the average price target, the 660 delegates sampled also on average saw a bottom of $1,080.

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Gold dipped below $1,100 briefly on Monday and Tuesday. Even before its tumble, the metal was on a losing streak, down more than 7 percent for the year.

"I would have to be worried if gold stayed below $1,100," Gero said, although he added that he doesn't believe that's very likely.

According to some traders, the commodity crush could provide an opportunity to jump into the market.

"Gold, right now, is oversold," Scott Nations, president and chief investment officer of NationsShares, said Tuesday. "It's because people really were hitting the sell button regardless of price."

Brian Stutland of Equity Armor Investments said although gold will be under pressure for the long term as the Federal Reserve looks to raise rates, the commodity could be due for a short-term rally.

"We've seen gold fall so far so quickly that it does make sense to take the opposite side here," Stutland said Tuesday. "For a technical trade ... I think that's a highly likely, nice bet to play for at least a quick bounce."

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