Gold prices are governed by supply and demand of the free market (like tulip bulbs in 16th century Holland), not by cartels like oil and diamonds.
What will keep gold prices down long term is the fact that gold can be produced, marketed and sold profitably at $400 per oz and that excess profits will eventually bring in ever more producers and eventually gold prices will reflect the highest incremental cost of producing and marketing gold plus a reasonable profit for return on investment for the producers and sellers of this commodity.
That's how a free capitalistic market operates.
That speculators are presently willing to pay 400% - 500% more than its long term intrinsic economic value is simply the next greater fool theory in operation.
Just don't be holding the bag when this bubble bursts..
Gold prices, like everything else, are of course driven by supply and demand. But one must recognize the enormous explosion of the central banks’ balance sheets and the money supply which devalues the paper currency. We are not seeing across the board inflation as in the 70s and early 80s at least not yet, but when inflation does arrive (because of economic expansion) it would be easy to see gold prices rise further. It is very difficult to assign an intrinsic economic value with unstable fiat currencies over time. Other markers of value such as oil, land food commodities have fluctuated wildly and cannot be considered stable units of value. Historically, the precious metals, have been the best measure of value. The only thing that fiat currency has
going for it is legal tender status, which of course is crucial.