NEW YORK ( TheStreet) -- Spot gold prices continued their positive price action Wednesday afternoon as the U.S. dollar exhibited vulnerability.

The U.S. dollar index was down 0.5% to $77.42.

"Few members of the press -- and for that matter investors and speculators -- stop to consider that the rise in the price of gold is tied to the value of the U.S. Dollar and not to the rate of inflation," James DiGeorgia, publisher of the 'Gold and Energy Advisor' and author of 'The Trader's Great Gold Rush' said in a Wednesday note. "The value of the dollar, of course, is tied to full faith and credit of the U.S. government."

That said, DiGeorgia thinks the level of faith and credit of the U.S. Government has become a "growing problem" over the past decade and gold has climbed in the meantime. Evidence of the falling value of the dollar, DiGeorgia believes, was recently indicated by Fed Reserve chairman Ben Bernanke, "who warned that the United States faces serious long-term challenges that could threaten the nation's economic future."

Separately, EverBank World Markets president Chuck Butler, in his Wednesday note, stressed that the dollar index is in "relentless decline," falling 12% from its June high. "So, June was the end of the dollar strength, although we've had bouts of it back and forth, the overall trend since June is of dollar weakness."

New York spot gold prices were rising by $8, or 0.6%, to $1,348.60 an ounce Wednesday afternoon.

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