The mistake people make is in comparing gold to other commodities, like copper or lead. Gold is not like other commodities. It is money and a safe alternative to fiat currencies. Thanks to 'quantitive easing' fiat currencies, in particular the american dollar, are being devalued. The dollar recently reached parity with the Swiss franc and a new low against the euro. This was a serious boost to precious metals, that surged on the news.
Gold is in a bull market that stretches back to 1999. Just look at the end of year quotes for the yellow metal (spot gold):
2000 -- $273.60
2001 -- $279.00
2002 -- $348.20
2003 -- $416.10
2004 -- $438.40
2005 -- $518.90
2006 -- $638.00
2007 -- $838.00
2008 -- $889.00
Even after its sharp pullback in 2008 -- mainly due to sales by funds needing to meet redemptions -- it still ended higher on the previous year. And is due to finish higher this year too. You cannot dispute what is a stone cold fact. And gold is far from popular at the moment. People are actually flogging the stuff to those 'Cash for Gold' people that have set up shop in every shopping centre in the country! It's getting very little media coverage and the man on the street just isn't talking about it. There will come a stage when we'll enter the third 'euphoric' stage of this particular bull market when gold will really go parabolic.
Also, it's claimed that gold is now expensive. It is not. Gold is up roughly 33% this year. Copper is up 125%, lumber is up 45%, heating oil is up 73%, palladium is up 92%, silver is up 64%. Relative to other commodites gold has a lot of catching up to do on the upside.
Now, nothing is for sure in life, certainly when it comes to the commodities markets. All of the above is what is LIKELY to happen, not what will definitely happen. The signs so far say to us that there is a lot of room for price increases, not just in gold. No evidence has appeared yet to suggest otherwise.