"The recent decline in gold from above $1,000 is prompting gold bears to say that the great gold bull market has reversed itself," says Martin Hutchinson who states, "Let me say right now: They're wrong."

In his Money Map Reporter, he explains, "Thanks to three key catalysts, we may well see gold at $1,500 an ounce this year, if not higher." Here's his outlook and a trio of ways to play this trend.

"These three catalysts – worldwide monetary policy, global supply-and-demand for gold, and gold's past performance – have already ignited a powerful rally that's virtually certain to carry gold to much higher price points, despite the breather the rally appears to be taking right now.

"Don't be fooled. Every rally needs a catalyst – something that ignites and then fuels the bullish trend. As noted above, gold has three. Let's take a look at each of them:

1. Monetary policy: More than for any other investment, gold's price depends primarily on the world's monetary policy. When monetary policy is loose, as it was in the 1970s, gold prices soar. When it is tight, as in the 1980s, prices decline sharply.

"U.S. monetary policy has been loose since 1995, and particularly since the recession of 2001 and 2002, and other countries have followed the US' lead. Since the subprime crisis exploded onto the scene last September, the Fed has been lowering interest rates.

"Gold has sold off in the past couple of weeks as the market has focused on the U.S. recession, believing that inflation pressures will decline, but that's wrong. Monetary expansion continues and even is intensifying, meaning that inflationary pressures will increase and gold will be the beneficiary.

2. Global Supply and Demand: For most commodities, price rises have an effect on supply and demand; a higher price increases supply and reduces demand, in 'price elasticity.' Gold appears to be an exception. For gold, rising prices appear to increase demand and decrease supply.

"While real global interest rates remain low, gold should retain its current dynamics, with speculative demand increasing as prices rise. Since the pools available for speculative investment are much larger today than they were in 1980, the predicted gold price 'spike' could even move well beyond 1980's peak price of $2,250 an ounce (as measured in today's dollars).

3. Comparison with past peaks: If gold had increased in price since 1997 by the same percentage as world dollar reserves, it would currently be trading at around $1,280 per ounce. The 1980 gold price peak of $875 per ounce intraday is equivalent to more than $2,200 per ounce when inflation is taken into account.

"At some point, with monetary policy as loose as it is currently, inflation will probably accelerate to a point that will force the world's central bank policymakers to take action. When that happens, interest rates will have to be sharply increased. Then – and only then – will the risk-reward potential for gold change enough that wise investors should sell.

"Remember that recessions don't stop gold prices from rising. Gold's first major peak was in the middle of the 1974 recession and its second was well into the first part of the 1980 recession.

"As inflation accelerates, it will probably take a few months for clear inflationary signals to cause the Fed to reverse its policies and attack inflation. And during that period, expect speculative demand for gold to intensify and its price to increase steeply.

"The longer the period before the Fed is forced to increase interest rates, the higher gold will go. We do not believe that target price of $1,500 is too aggressive. It seems very probable that with speculative demand tending to increase, gold could reach that latter level before the end of 2008.

"The bottom line: Until the Fed reverses monetary policy and increases interest rates, gold is one of the best investment bets in an uncertain world.

"The simplest way to play gold is through the StreetTracks Gold ETF (NYSE: GLD), which with $19.8 billion outstanding has ample liquidity, and tracks the gold price directly. Alternatively, you should consider buying gold mining shares.

"Barrick Gold Corp. (NYSE: ABX) is a Toronto-based company with mostly North American production, as well as some South America and Africa properties, and some copper and zinc add-ons. It has a $38 billion market capitalization, so there's plenty of liquidity.

"It has a trailing Price/Earnings ratio (on the most recent 12 months) of 34, but a forward P/E (on the next 12 months) of 16. By gold-mining standards, this company has a substantial presence, is reasonably valued and has little political risk.

"And, the company also recently sent some very bullish signals to the market and then this week said it was confident that it could meet its 2008 output target of up to 8.1 million ounces of gold.

"Yamana Gold (NYSE: AUY) is another U.S.-listed Canada-based company, but this one does its mining in Brazil, Argentina, Chile, Honduras and Nicaragua. It has a market cap of $9.7 billion and a trailing P/E of 40, but its forward P/E is only 14.

"Despite its geographic reach, it faces only a medium geopolitical risk. Expect the company to double production to 2.2 million ounces per year by 2012, primarily in Brazil and Argentina."

Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.