My opinion is that gold is irrational, and does not perform according to cycles and or indicators. Let me clarify this, when people talk about gold, there are a small number of gold bugs, a quantity of rational financial people and then there is the rest of the world, which is in the majority. With gold, there are a small number of people with emotional ties, who are either for or against. The majority of the world's people are probably presently indifferent. My belief is that it is this rest of the world that will determine the fate of gold. What this majority of people do may be financially irrational to us, but they will determine the future price action of gold.

Now, what is happening with the unwashed majority of people that will determine gold's action in the future? Some people in the world are astute and hard working and are gaining middle class standards of living and are looking to preserve some of their new-found wealth. Gold may be a savings/hoarding vehicle for them. One can only be concerned about preserving wealth, once one has attained a sufficient level of sustenance living. As the world is in the midst of modernizing and emerging to higher standards of living, there may be a significant number of people, that are fortunate enough to be in such a circumstance of looking for a means of investment and or preserving their wealth. These people will probably not perform financial analysis, but will just be trend followers and purchase the precious metals from tradition or instinct. As the prices of the precious metals gyrate up and then down, the buying from this group of people may serve to put a floor price in. Does this conjecture support the buying of precious metals that appears to be coming from the emerging world?

To summarize, the author is of the view that there is a major growth trend in the emerging world that is dragging the majority of the world's population to a higher standard of living. The author believes this large group of people may have a traditional cultural view of the precious metals that they are a store of wealth. That view may be irrational to us Westerners, but it will have a significant effect on the price of the precious metals.

So the prognosis for the gold and silver in the near term, is that they will slowly move up in price supported by the growth of the emerging economies.