Gold hit a new record price of more than $1,500 an ounce on Thursday. Economists say the recent strength of the precious metals market shows that investors are looking for a safe haven for their money as they worry about inflation, the strength of the dollar, oil prices, and shocks from Europe, Japan, and the Middle East.
Gold tends to be an economic indicator: The worse the economy is doing, the higher the price of this age-old commodity.
"When gas goes up, we expect calls. When the dollar goes down, we expect calls," says Jose Caba, who works with U.S. Gold Buyers, a refinery operation in the heart of Manhattan's jewelry district on 47th Street. The company -- one of many that advertise online -- does most of its business through sellers mailing in their gold items from all around the country. The refinery melts down the gold it buys into bars, which it then sells to specialty chemicals company Johnson Matthey.
While $1,500 an ounce is a new zenith for the shiny metal, is this the top? Gold's track record says maybe not. It has gone up every year since 2001, and jumped in price more than 25% in the last 12 months. It has gained 5.8% since the beginning of 2011, according to The Wall Street Journal.
In the small, windowless office that is the headquarters for U.S. Gold Buyers, Caba spreads out various pieces on a desk. An old suit-pin with the name "Vilo" in script, a shamrock tie pin, a pendant that says "Give Me A Break." It's a typical mail-in package, he says. While each piece is only a few grams, they can add up to hundreds of dollars for sellers.
Gold bubbles come and we go, including one in April 2010 that also sent buyers and sellers to market. Under normal conditions, Caba estimates his company receives between 200 and 250 overnight packages a week. Recently, he says that figure is around 400 or more.
"We see everything from rings, teeth, jewelry, pins and lighters. Everyone has a little gold somewhere," he says.
Other reports from gold buyers, pawn shops and jewelers around the country also show a bump in gold sales -- and price increases in everything from new watches to wedding bands.
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