Gold prices have certainly been a roller coaster ride over the last few weeks. Tumbling from record highs down to the $1,600 an ounce range, many investors in the sector continue to be puzzled by the metal's recent actions. After all, most of the reasons for investing in the precious metal still exist. Europe and the United States still have their massive debts to deal with; currency debasement is still occurring and high inflation looms on the horizon. With these circumstances still in place, one major gold supporter is telling investors to stay the course and that we'll see higher gold prices soon enough. (For more, see 5 Best Bets For Buying Gold.)

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A Golden Founding Father
In the gold and silver world, Rob McEwen is as big of a celebrity as Jim Rogers or Eric Sprott. After taking a relatively small $50 million dollar investment in a handful of junior mining firms, he transformed them into the mining powerhouse, Goldcorp (NYSE:GG). With one of the richest gold mine deposits in the world (Red Lake, Ontario) as well as one of the lowest cash costs of any major miner, Goldcorp has emerged as one of the largest and most profitable majors in the sector. So, McEwen certainly knows his way around the gold industry. His latest predictions for precious metals prices are enough to make any gold bug excited.

Speaking to the Geological Society of Nevada, McEwen firmly stood behind his prediction of $5,000 an ounce for gold and $200 an ounce for silver, within four years. Robert urged investors to think about gold as a source of money and that it is a currency. To that end, central banks in China, Russia and India are buying gold in spades as a way to diversify their reserves and restore confidence in their currencies. The mining guru believes that the Chinese and Russians will eventually increase their gold holdings to the level that the percentage of their total currency will be greater than that of any other currency in the world. At this time, they will assert that their currency should become the reserve currency of the world. With this immense buying going on, coupled with the difficulties in finding new supplies of gold, McEwen sees gold surging in price over the next four years and could see prices spikes above $5,000 if conditions are right.

Playing McEwen's Bullish Forecast
For investors, McEwen's bullish long-term forecast for gold prices is certainly appealing and with gold trending downwards lately, it could be a good time to strike. While McEwen agrees that physically backed gold ETFs, like the ETFS Physical Swiss Gold Shares (ARCA:SGOL) have their appeal, he prefers the mining firms. His fondness drifts especially towards the junior miners with their "potential to explode to the upside if they are lucky." The Market Vectors Junior Gold Miners ETF (ARCA:GDXJ) is still the easiest way to gain exposure to a basket of these firms and has fallen hard over the last few weeks. Similarly, the Global X Gold Explorers ETF (ARCA:GLDX) can be used to bet on the smallest of gold mining firms. (For related reading, see The 5 Best Performing Gold ETFs.)

For those investors willing to bet directly on McEwen's potential success at creating the next Goldcorp, U.S. Gold (NYSE:UXG) could be the answer. He also holds 20% of the shares in the firm as well as owning 30% of the shares of Minera Andes Inc. (OTCBB:MNEAF.OB) and plans on merging the two in order to form a new company called McEwen Mining. The combined company would have zero net debt and large copper, silver and gold reserves and would be on the S&P 500 Index by 2015. The only other gold firm included in the index is Newmont Mining (NYSE:NEM). Additionally, investors looking at other gold juniors may want to consider Rubicon Minerals (AMEX:RBY). McEwen sold his stake in the firm to focus on the merger plans, but the firm's outlook still remains the same.

The Bottom Line
Rob McEwen is slouch when it comes to the gold industry and his latest forecast is enough to get the blood of any gold bugs pumping. For investors, the recent downturn in gold prices is a great buying opportunity to add gold equities in the wake of his $5,000 an ounce prediction.

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At the time of writing, Aaron Levitt did not own shares in any of the companies mentioned in this article.

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