What drives the prices of gold ?

The most important driver of the gold price over the medium and the long-term is the relationship between the US$ and the other major currencies. The official link between gold and the Dollar was broken in 1971 and the trends in the US$ and the gold price have been in opposite directions. We can also look at the gold price relative to the Swiss Franc. We do this because the Swiss Franc is the currency with the highest positive correlation to the gold price.

In the short-term the influences on the gold market can vary from one week to the next and can range from selling by the banking community specifically designed to suppress the gold price(profit taking), to news/propaganda, to the medium/long-term influences mentioned above.

If you want a easy answer: Primarily gold trades inversely to the US dollar. The dollar is down so gold is up.With the dollar being so weak,gold will remain high til the dollar rebounds.

Comments welcome,for i know there is more to the story than what i have touched on.