One great way to gauge the economic state we're currently in is to keep an eye on the gold price chart. Savvy investors know that as the value of the dollar falls, along with other distressing economic signs, such as high unemployment, is usually a sign that the price of gold is going to go up.

Not just gold either, but other commodities as well. A lot of investors will try to keep the value of their investments safe by switching many of their holdings to gold and other precious metals.

Lately it's been easy to tell what many investors think about the state of the economy since gold prices continue to rise. The price of gold, as with other commodities, is tied to supply and demand. The ever increasing prices of gold is an indication that demand is high.  That is in direct correlation to the fact that the value of the  dollar is falling.

Many investors are still buying gold even though the prices are at an all time high, which goes against the wisdom of buying low and selling high. Many believe that gold will continue to rise for the foreseeable future.

Others, think that the gold 'bubble' will burst, similar to what happened with the housing market, and those that waited too long to jump in and paid a lot for their gold, will either be stuck with it for a long time (until prices rise again) or could take a bath and lose a lot of their initial investment.

Obviously, it remains to be seen which camp is right and which one is all wet.

Of course, the price of gold can fluctuate several times throughout the day. The price you pay per ounce will also be determined by the way you buy your gold. If you buy jewelry you can expect to pay more per ounce than the flat rate price simply because the piece of jewelry has a lot of labor and fabrication put into it so you will have to pay for that.

If you buy a gold coin you may also pay more than just the straight price per ounce if the coin is an antique or exceptionally rare. In those cases you will be paying more than just the price of the gold that makes up the coin, you'll also be paying for the added value to the coin due to it's age or uniqueness.

The reason that the current price of gold is at an all time high is simple, there is currently a very high demand. The more people want to have the gold that is available, the higher the prices for that gold.

With the instability of many economies around the world, people are seeking safety for their assets and are buying more gold and other precious metals. The more they buy, the higher the price. Simple supply and demand.

With the gold price so high right now, only you can decide if it makes sense for you to jump right in. Everyone has their own opinion, but only you can decide what is right for you. Even if you do decide to take the plunge don't invest everything. You never want to have all your eggs in one basket.