Gold Bugs Ready to Rock

Look for a first-quarter spike to $850, he predicts, but he acknowledged that he expected a similar high this year that failed to materialize.

He recommends investors hold at least 10% of their assets in physical metal. Products like the bullion ETFs, streetTracks Gold Shares(GLD Quote) and iShares Comex Gold Trust(IAU Quote), and mining stocks, aren't really the same as owning gold, but rather are "trading vehicles," he says.

Turk's company, GoldMoney, holds bullion for investors in segregated accounts in a London vault. He owns physical bullion, but neither ETF.

Frank Holmes, the chief investment officer at U.S. Global Investors and team leader managing the U.S. Global Investors World Precious Minerals Fund, sees a high of $720 to $800 next year for gold, but not before a first-half correction as the dollar stabilizes.

With low inflation, the dollar is yielding a good real rate of return, says Holmes. He sees price support for bullion at around $580 to $600, with an average price of $680 through the year.

Longer term, he says, diversification by central banks -- China and Russia in particular -- will provide solid demand, and strong jewelry buying should return as consumers become accustomed to current prices.

Holmes recommends buying in-the-money long-term options on Newmont Mining (NEM Quote) if the price pulls back. He warns investors to avoid the out-of-the-money LEAPS, saying they're too risky.