We believe that the fund interest in silver is built upon a much narrower base of investors than gold, leaving it more vulnerable to big price moves in either direction.

Price dynamics in gold next year will continue to be largely determined by speculative interest, backed by a myriad of justifications like inflationary risks, energy-price led economic slowdown, expectations of a US dollar correction, soaring physical demand, supply-side constraints, hopes of large scale central bank buying and so on.

Any price dip has been quite well supported by fund buying, and aggressive selling has been discouraged. The positive sentiment remains very strong and people are looking for further price gains.

The weaker (gold-dollar) correlation late last year and early this year was due to the overwhelming enthusiasm among the speculative community to drive prices higher.

With a lack of fresh catalysts to trigger a significant move in either direction, we expect gold to remain in its consolidation mood over the near term.

Prices are being driven up by hedge funds, which are buying platinum because its fundamentals are looking good. Platinum has been in deficit for the past six years, and it's expected it will be in deficit this year.