Gold Rush: More People Investing in Gold During Economic Downturn

Chicago - It used to be, you may have gone to Toys R Us, Best Buy or Target to find the hottest holiday present, but this year some savvy shoppers are bypassing the traditional holiday haunts to cash in on the current gold rush on gold.

"We have everybody from young people putting all their investment into it, to people buying hundreds of thousands, million dollar items," said Marlon Mathre, owner of Fox Valley Coins in Naperville.

Mathre said he can't keep gold in stock these days.

"People are buying the Cougarands (South African manufactured), bullions, American Eagles in droves. Small amounts and large amounts. Huge amounts sometimes!" he said.

But this isn't like collecting baseball cards or comic books.

For most of Mathre's customers, this golden opportunity is more of an investment.

"I'm a history buff and gold is something people always want to have in an economically uncertain times," gold buyer Ken Cook said.

Cook, a father of four, believes investing is worth it's weight in... well, you get the idea.

"I've got four children,” he said. “I've got one in college right now, and I've got 15 years of college ahead of me. I'm looking at precious metals to augment if not outperform some of the other vehicles I have financially to achieve those goals."

According to some market analysts, Cook may be onto something.

"Gold and silver used to be the perfect gift for every occasion. Now, they're the perfect hedge for every occasion," said Phil Flynn, vice president of Chicago-based PFG Best.

Flynn said that historically gold is one of the best ways people can protect themselves against inflation: "People are concerned about the budget deficit, they're concerned about bank failures, and they're going to the currency of last resort."

It's a mindset that's driving gold prices higher, at least, until the economy improves.

"During crises in the past, gold has been the traditional safe haven...it's going to go for sometime, but when it ends it will end quickly and maybe ugly," Flynn said.

Flynn said this latest golden age really took off in March when Bears Stearns collapsed and the economy caved. Since then, gold has gone from just under $900 an ounce to around $1,200 and it doesn't appear to be slowing down any time soon.

In his 45 years selling coins, Harlan Berk, owner of Chicago-based Harlan J. Berk LTD, said this year has been unlike any other. He said his business doubled in 2009 compared to 2008.

"Now, Americans are starting to realize they can and should start buying gold," said Berk. "As someone Said in a TV commercial, gold has never been at zero."

Berk said he predicts the price of gold is only going to get better for the foreseeable future. He added that one customer recently bought $4 million worth.

If you follow his golden rule, it seems like a wise investment... at least for now.

"At the moment, nobody who's bought gold has lost money because it’s gone up so much," he said.