People generally hold gold as an inflation hedge, i.e., even if inflation goes through the roof, gold should still hold its value. Over the long run though, the expected return to holding gold, after adjusting for inflation, should be close to zero. There are some factors that can drive gold up or down in the short or medium terms, but generally it is a just another mineral we dig out of the ground that for historical reasons happens to have some value.
Some of the key influences on the price of gold include:
-The volatility of the market/economy;
-Gold consumption (like demand for jewelry);
-Gold output from mining firms;
-Gold purchases or sales by central banks; and
-Gold purchases or sales by other investors.
Central banks don't hold as much gold as they used to, but they still hold enough to supply short sellers. There is no shortage of gold to borrow and sell, which is why gold futures are always in "contango" (the further into the future one looks, the higher the price is). This does not necessarily reflect the expected future value of gold so much as the arbitrage relationship that exists between gold in the spot market and gold futures. There are ways to profit from trading gold-linked securities (best discussed elsewhere at another time), but holding naked long positions in the physical commodity is not typically considered to be one. If you do profit from holding physical gold, you are really just making a speculator's return, which you could have earned investing in something else.
If you are looking for an interesting story about metals trading, try looking on Google for "Hunt Brothers" and "Silver".