By Jeff Clark
I had my TV tuned to a business show that loves to give predictions on the markets and the economy. And on that day, one of the program's regular guests declared it was time to "short" gold because it had reached its top. The precious metals bull market was over, he said.

Hey "Bert", I'll try to be nice in my rebuttal. What was your reasoning – technical analysis of wave counts? Falling demand? A telling ratio? Sun spots? No, Bert noted that upscale department store Harrods in London has begun selling Gold Bullion and coins "over the counter". Ergo, the top was in.

Nice try, but this is amateurish. You really shouldn't be playing with the big boys if that's the basis of your call.

Yes, gold will someday put in a top, and since the Gold Price is largely determined by psychology, the end of the bull run will be marked by behavioral types of signals. But calling a top in gold now is like declaring that WWII was over because the Allies won a small skirmish in early 1942. To have made such a statement, based on a small, isolated event, ignored the greater forces that had yet to play out and would have made any journalist or military strategist look foolish indeed.

And here's why "Bert" looks equally silly today...

If the top were in, we'd be in the midst of an all-out Mania. Are we? Do you get the impression there's a rush into gold by the greater public right now? Are headlines blazing the covers of major magazines pronouncing gold as the new investment king? Has Wall Street gone gaga over gold and silver?

I ask because these are the true signs that a trend has entered its final blow-off top and would signal it's time to get out. So let's put Bert's prognostication to the test.

First, I struck up casual conversations with my friends, neighbors, relatives, acquaintances, my wife's co-workers – heck, even my seatmates on airplanes – angling to learn how much gold they were hoarding, about the killing they were making in gold stocks, and how they were getting rich from all their precious metal investments. (In fairness, I had to exclude my dad, who is an award-winning gold panner, but he's the only one.)

I found no one – not one person – who is actively investing in anything gold or silver, let alone rushing to buy or hoard the stuff. I had two people who confided that they did own gold, but in both cases it was inherited. A few were curious how they would go about doing such a thing, and fewer asked if I thought they should. Most everyone looked at me blankly when I asked; they didn't seem to know what I was talking about. When I got a reaction like that, it was pointless to ask about Gold Mining stocks. Of the handful I did ask, most had never heard of Barrick Gold, the world's largest gold producer.

Now ask yourself the same thing: how many of your family, friends, neighbors, and co-workers are Buying Gold and silver coins? Are any of them giving you hot stock tips about a fantastic gold producer, or telling you about the latest gold discovery made by a company in China? Have any fellow investors told you they're dumping their brokers because they can select gold stocks better on their own? Anyone telling you they're going to night school to learn the Gold Mining business?

Next, I surveyed a large sampling of print media looking for some of these signals that Bert surely had spotted. Over the past couple weeks, not one of the major business magazines I reviewed had anything on the cover about gold or silver. Further, there were no articles on precious metals, such as the best ways to buy or store all this gold everyone is buying.

One magazine ran an article about ways to prepare for inflation, and gold wasn't even mentioned! I did see an ad from the US Mint in another, along with a couple small ads in the back that said they had the best prices on bullion (right beside the teasers for buying a Russian wife), but that was it. Even the portfolio allocation models recommended in the articles I read made no specific mention of precious metals (one recommended a "resource" fund, but their discussion of it was centered around energy investments).

Other than the articles you seek out, how many mainstream magazines do you see extolling the virtues of gold and silver on their cover? How many bestsellers are prominently displayed at your nearest bookstore that scream at you to buy gold stocks? Are you getting fed up with all the junk mail you get about gold and silver?

Last, I went out of my way to look for stories on gold and silver on TV and radio. About all I could find were the same ads that popped up after last year's Super Bowl commercial by Cash4Gold. A couple programs quote metals prices, and I was able to find another that actually used the word "gold" in a sentence. It might just be me, Bert, but I can't find any news anchors talking about the latest gold discovery or that "must own" gold stock. No in-depth special reports from investigative journalists on the hot Canadian junior mining sector. Nothing on my radio about the best ways to store all the silver every smart investor has been buying.  Continued...