Gold price will bounce back over the long term: Rule

Gold fundamentals remain strong despite the plunge Wednesday to prices below$1,600 per ounce, said Rick Rule of Sprott Asset Management in a CNBC video interview.

"I think the technical [signs]  are scary, but the fundamentals are pretty good. What you find in gold bull markets is that retrenchments are fairly frequent, and this is nothing particularly unusual," he told the broadcaster, adding prices have gone as much as 15% to the downside before moving back fairly substantially.

Rule emphasized that the fundamentals are excellent with gold denominated in US dollars and the government appearing to do their best to depreciate the denominator.

He thinks the nominal price of the precious metal will do well over time as it has done in the past.

"Certainly [the price] has corrected — corrections are normal and healthy in a bull market," he said, adding silver, platinum and palladium prices will also do well over time.

Rule said this is a market in which he's much more comfortable being long than short.

Image: Youtube screengrab