"Gold (company) shares are undervalued and the gold price is going higher because of all the financial uncertainties. You will see a continued shift of investors putting more of their portfolios into gold," Schaeffer commented Thursday on the sidelines of the New York Emerging Miners Conference.
"It's on its way to $5,000 in the next three or four years," he added.
Gold futures in the United States were trading at $1,654 on Thursday. The futures hit a record high above $1,900 last September.
"Gold was motoring last year. Then, in the fourth quarter, it rolled over and took the stocks with it," said Schaeffer.
Schaeffer, a well respected voice in the commodities industry who was to give the keynote address to the conference on Friday, said the retreat in the gold price last year was mainly because of the European debt crisis.
"If you go back a couple of years, people were trading out of the dollar into the euro. They thought the dollar was going down the drain," said Schaeffer.
"Then suddenly they thought, 'Wait a minute, that strategy's not working,' and they moved back into the dollar. And gold often moves in an opposite direction to the dollar."
Schaeffer pointed out the anomaly that gold company shares lag the metal's price -- something often viewed as a barrier to more investment in the stocks of the major companies."
"The seniors have lost their luster," he said. "If someone is looking at the gold market and they happen to look at the seniors, they say, 'Well, they haven't done anything.'"
He noted data showing that since 2006, the gold price has risen 129 percent, while most major share prices have risen only 6 percent to just under 35 percent. While the stock of many other seniors has actually fallen.
"Those are the leaders in the industry, and an investor would look at that and say, 'They've done nothing.' You're not even getting their boats going up with the tide."
The senior gold stocks, he said, have been trading well below their expected level relative to the gold price for the past 25 years. "They've been over-sold."
The solution, Schaeffer said, is for major gold companies to boost dividends by linking the dividend to the gold price.
"These companies, if management wakes up, have lots of cash and these metal prices are filling their treasuries up. Rather than make some of these horrible investments they've made, start increasing the dividends.
Schaeffer concluded by saying "In this environment, where yields are so low, to have the exposure to gold, plus the higher dividend, I think you'd attract a lot more money."