Gold used to be the base of currency. So much gold was kept by the Federal Government that it could pay any/all bills at once, if need be. So, it was king. Since sometime around WW2 I think, the US went off of the gold standard and let the market set its own prices, "Eminent Domain" - "Let the buyer beware" (of what he pays money for). So, prices fluctuate, mostly, money rises to the highest price people will pay. A typical business ploy. When people stop buying, demand falls, and prices usually then fall. If the demand increases, prices increase to the point of 'what the market will bear'. That's a 'bear' market. A 'bull' market is the other side, when prices rise, rise, and rise again, until it slows, stops, or fall precipitiously - you have a 'crash'. The stock market is where people 'buy into' a company, like facebook or apple. If the company get richer, dividends are paid out, the money is usually used for improvements, and the company gets better, more people buy in. More money, etc. This would be like the computer revolution from the 1960's, those with better ideas sooner improve sooner, others disappear. Gold is -now- like any commodity - rice, autos, candy bars - so you can buy and sell it. .. Now, right now, the market is slowing, growth in China, car purchases, truck puchses, home purchases, the European economy all slowing. So gold follows, or it will be left behind with the next Bull Market. Slowing demand, gold becomes more valuable. But IT could be wrong,
Some of the factors that have led to the hike of prices for gold include reflation, which the market is experiencing and the increase in its demand. Uncertainty about the Economy is making investors flock to Gold, which has delivered returns in the past few years. Again, the costs are hiking since we are headed to festive seasons.