The dollar hit a 52-week high today --- http://data.cnbc.com/quotes/.DIND/tab/2
The USD weighs heavily on gold because gold is priced in dollars. If the value of gold is increasing, which it is, and the spot price of gold stays level or increases at the same time the dollar strengthens, then the value of gold is in fact increasing. It's just not in a way that's immediately perceptible. But, it should eventually become more obvious.
A recent quote from an analyst I trust and pay to read, "...I could discern the sense that the strong U.S. dollar is due for a major correction in the not-too-distant future. This will cause many foreign currencies to appreciate. It will also probably cause the prices of both oil and gold to rise. How soon? We'll probably be well into it during the first quarter of 2009. So it may be time to diversify a portion of your funds out of dollars."