Prices go up when demand increases. This is what has recently driven the price of gold to new heights, and there doesn't appear to be any signs that that demand will do anything but grow for years to come. Consider the following.

The up trend for the precious metals has accelerated recently with a spat of supportive news. In September 2009, the gold bugs were buzzing with the news that China was pushing their citizens to invest in precious metals as detailed here. Then on November 4th, 2009, the Indian central bank reveals a surprise purchase of 250 metric tons of Gold bullion from the International Monetary Fund as related here. Finally on November 12, 2009 in Vietnam, which had restricted imports of Gold in mid 2008, the local price had climbed to a $60 premium from the global spot price, before the government relented. All these events are indicators that the marketplace fervour for Gold is hot and getting hotter. It is interesting that these events are all happening on the Asian side of the world ...... Source

Not only is demand rising, but supply is seeing changes as well. Consider the following chart showing declining mine production.



There is not enough new supply to keep up with the increasing demand.