This is why the gold price will go up in the long-term.
First, Three Facts

1. Gold is a finite resource: with the current extraction rate (2,500 tonnes per year), underground gold reserves last only another 20 years (51,000 total reserves).
   
2. Word demand is increasing: a growing world population and increasing overall wealth drives up gold demand for jewelry and industrial purposes
3. Central banks increase their gold reserves: Since 2009 central banks have become net gold purchasers.
   This is especially true for the Chinese, Indian and Russian central banks that have vowed to increase their reserves of this precious metal.
   

Second, Gold Supply There are three gold supplies, in brackets their contribution towards the total supply:

1. Mine Production (59%, 2,209 tonnes)
2. It also needs a longer lead time as mines may take up to 10 years to be operational.
   For this reason, gold mining output is relatively inelastic which it cannot respond promptly to a rapid change in price outlook.
   
3. Recycled Gold (35%, 1,323 tonnes)
4. The high value of this precious metal sets off the recovery and recycling to be viable.
   Its process consists of extracting the gold from scrap materials, melting it down, refining and finally reusing.
   
5. Net Official Sector Sales (6%, 234 tonnes)
6. From 1989 to 2009 central banks and other multinational organizations were net sellers of gold, e.
   g.
   they sold more metal than they purchased.
   However, since 2009, central banks have in average become net buyers of gold.
   

Third, Gold Demand The demand for gold has been attributed to a rapid change of the socio-economic levels of the many developing countries in the world.
There are three major classification of gold demand as follows:

1. Jewelry Demand (57%, 2151 tonnes)
2. Jewelry demand is driven by a mixture of consumers' affordability and desirability.
   About two-thirds of gold demand is coming from jewelry which shows that it is one of the world's biggest categories of consumer goods.
   In 2009 the jewelry demand amounted to about US$55 billion.
   
3. Investment Demand (31%, 1,182 tonnes)
4. Many investors believe that investment in gold is one of the most viable investments because of its abilities to counter against volatility and protect against risk.
   From 2003 up to 2009 investments in gold saw an increase in value terms of about 120%.
   Moreover, in 2009 it drew net inflows of approximately US$41 billion.
   
5. Industrial Demand (11%, 433 tonnes)
6. This comprises the industrial, medical and dental technology which accounts to about 11% of gold demand.
   In the industrial sector, gold has a high thermal and electrical conductivity and an excellent resistance to corrosion.
   In the medical field it has bio-compatibility attributes and resistance to bacterial colorization.
   

Fourth, Remember

1. Gold is a finite resource: with the current extraction rate (2,500 tonnes per year), underground gold reserves last only another 20 years (51,000 total reserves).
   
2. Word demand is increasing: a growing world population and increasing overall wealth drives up gold demand for jewelry and industrial purposes
3. Central banks increase their gold reserves: Since 2009 central banks have become net gold purchasers.
   This is especially true for the Chinese, Indian and Russian central banks that have vowed to increase their gold reserves.
   

This is why the gold price will go up in the long-term.