Gold prices have taken a hit in recent months, but are starting to make gains again. Prices improved by more than 1% in the last week to close out at the highest level in months, according to MarketWatch.

The gains are tied to the slight hit the US dollar took this week amidst Detroit’s declared bankruptcy (the largest municipal bankruptcy filed in US history) and other factors. This is because international gold prices are usually based in dollars: when the dollar takes a hit, gold becomes less expensive and that encourages more buying.

Possibly supporting gold’s slowly improving prices are recent statements from the US Federal Reserve chairman Ben Bernanke. The US Fed currently makes $85 billion worth of bond purchases every month (also known as quantitative easing) which traditionally helps gold prices. Although rumors of an improving US economy raised fears that the Fed would be pulling back on stimulus spending, Bernanke said it was too soon to tell whether the bank will be slowing spending. This is generally being viewed as a good sign for metal prices.

In the long term though, if you’re thinking of investing in gold, some say that it may not yet be the right time. Many factors affect the price of gold, so a ‘wait and see’ approach may be best for now, especially depending on how well the US economy does.

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