Gold is Viewed as a Currency
When you think about trading in gold, you can equate it to currency trading. While gold is technically a commodity, categorized as a precious metal, it in fact trades like a currency. Like most commodities, the supply of the product and the demand drive the price over the long term. Short-term fluctuations are driven by sentiment.
Gold is quoted in US dollars and its characteristics on a global stage, provide traits that make it appear to be a currency. Gold is held in reserves by central banks, along with dollars which provide a benchmark for their liquidity.
Since the gold trading price is quoted in US dollars, as the dollar rises in value, gold becomes more expensive in other currencies. You can see from the chart of gold versus the US dollar index below that, generally, as the dollar declines gold prices rise and vice versa. Additionally, gold is seen as a safe haven currency, which you would buy if you believed a devaluation of other currencies was imminent.