Gold soared 650% from August 1999 to August 2011.
But it's down 24% from the $1,885 peak and in recent days has whipsawed gold investors in a way they haven't experienced in 30 years.
The bear market has gold bugs reaching for the Dramamine. But we reached for the telephone instead and dialed Singapore – and legendary investment guru Jim Rogers.
Many of Wall Street's biggest investment banks are calling for additional blood-letting – meaning gold prices have a lot more room to fall. But in his usual contrarian manner, Rogers dismissed the consensus.
Indeed, the former hedge-fund manager and best-selling author believes this is a badly needed – even healthy – price correction.
And that will set the stage for a new bull market in gold – and a run to record prices that are sure to come in an era of cheap-money policies by the world's central banks, Rogers told Money Morning during an exclusive interview.
"Gold was setting us up for some kind of correction," Rogers said in a Sunday night telephone interview from his home. "Gold needed a correction – it still needs a correction – and I hope this is the proper correction which gold needs. Then gold – somewhere along the way – will make a bottom and we can all join in the bull market as [it] goes higher and higher."
And make no mistake: The shiny metal is going higher – much higher.
"Gold has to go a lot higher over the next decade or so, because [the world's central banks] keep printing money," he said.
Of course, it was just one week ago when gold suffered its worst two-day rout in 30 years. And even though that's been followed by a five-day winning streak that was capped off by a 2.3% gain yesterday, gold is still in bear-market territory.
"Gold is going to shake out the mystics – there are still a lot of mystics in the market," Rogers said. "I have guys writing me saying this couldn't be happening. I say, "Well, get out your quote machines, it is happening'."
About the Author
Before he moved into the investment-research business in 2005, William (Bill) Patalon III spent 22 years as an award-winning financial reporter, columnist, and editor. Today he is the Executive Editor and Senior Research Analyst for Money Morning. With his latest project, Private Briefing, Bill takes you "behind the scenes" of his established investment news website for a closer look at the action. Members get all the expert analysis and exclusive scoops he can't publish... and some of the most valuable picks that turn up in Bill's closed-door sessions with editors and experts.