A question that has been wracking the brains of economists for thousands of years... since a time when the Roman Empire flourished and scientists thought that the world was flat.
What we do know is that prices are determined by supply and demand, the most long-standing of economic theories... which at this point is the most concrete of all economic laws. The supply of gold is increasing very slowly, as it can only come out onto the open market as it is mined, refined, and sold... but is otherwise at a constant amount. Also, gold is a very rare substance to begin with, which creates a lack of supply.
The real question that bothers most economists is the Demand side of the equation. Demand is a force that is supposed to be driven by "need" or an ability to take a raw material (like Gold), combine it with knowledge, and create something practical that people have a need for. The problem with gold is that it is almost never practical. It is an inferior metal in terms of strength, durability, and even polish. There are many other types of metals that are vastly superior in every aspect... yet our world feels this desire towards gold.
Economic theory would argue that after time, people would realize the lack of value in gold which would lead to decreased demand and in turn, a decrease in price. However, gold is at approximately an all-time high and shows no signs of slowing down.
Perhaps on some level this increased demand for gold is another sign of our ever-present need for luxury. Or perhaps gold has just had such a long-standing reputation as a "status symbol" that it could take another thousand years before we fully realize the lack of value evident in gold.
As it stands, our economy clings to gold in times of need or instability like a child to a prized blanket. Even in a time where our currency is no longer backed by gold, the price of this shiny commodity seems to be moving ever-forward.
What does the future hold for gold? Will society ever wake up and ask "what is gold really worth?" and what drastic effects will this have on our economy if this were to happen? The truth is that gold has been a strange and unpredictable case study for economists for a few thousand years and shows no signs of changing anytime soon.
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