There's a compelling reason for investors to hold gold in their portfolios, Joseph Foster of Van Eck International Investors said Wednesday.
"Gold reacts to financial stress, and the markets are convinced that there's no financial stress to look forward to. They're convinced the Fed will taper, eventually reduced their QE and things will be fine," he said.
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"Despite that, I think we still live in an environment where acute financial stress could come back into the markets at any time, and that's why we recommend or encourage people to have some allocation to gold if and when that happens."
Gold declined $4.70 to end the day at $1,225.10 per ounce.
On CNBC's "Fast Money," Foster noted the precious metal's recent trading behavior.