Rising prices usher in latest gold rush

Associated Press

NEW YORK

For what is normally a sleepy month, there are so many customers at the Gold Standard, a New York company that buys jewelry, that it feels like Christmas in August. Uncle Ben’s Pawn Shop in Cleveland has never seen a rush like this.

Welcome to the new American gold rush. The price of gold is on a remarkable run, setting a record seemingly every other day. Stomach-churning volatility in the stock market this month has only made investors covet gold more.

Some want it as a safe investment for turbulent times. What worries some investors is that many others are buying simply because the price is rising and they want to make money fast.

“Is gold the next bubble?” asks Bill DiRocco, a golf company manager in Overland Park, Kan., who shifted 10 percent of his portfolio earlier this year into an investment fund that tracks the price of gold. He stopped buying because the price kept rising.

In October 2007, it sold for about $740 an ounce. A little over a year later, it rose above $1,000 for the first time. This past March, it began rocketing up. On Wednesday, it traded above $1,793 an ounce, just shy of last week’s record of $1,801.

Meanwhile, stocks, despite rising sharply in the past two and a half years, are only slightly higher in price than they were a decade ago. Since hitting a record high in October 2007, the Standard & Poor’s 500 index is down 23 percent.