So basically, ever since it became legal to once again own physical gold, people who understood a little bit about economics and inflation (in the 1970s we had stagflation, an even worse condition of a stagnating economy combined with inflation) bought gold as a hedge against the decreasing value of the dollar. Looking back through recent history, you will see that when crisis hits, demand for gold goes up. Only today, we have so many "gold like" instruments traded which are convoluting the actual price of gold so we have no idea what physical gold is really worth anymore. But we will find out soon enough when the gold ETF and ishare holders realize that their paper gold is not really gold and want to trade it in for the real thing.