Booming Precious Metal Prices Drive Gold Rush

DAVE CARPENTER

CHICAGO (AP) — Gold futures climbed to a new high Thursday, giving another nudge to the gold rush on Main Street as some people scramble to turn in their old jewelry for cash.

The price of the gold futures hit a record $1,123.40 early Thursday — confounding market analysts who thought there was no way gold would remain so expensive when it first cracked the unheard-of $1,000 mark last year.

The remarkable run has implications far beyond savvy investors. In New York's diamond district, more people started showing up late last year to sell their gold, and the crush hasn't let up, said Anthony Iannelli, owner of Iannelli Diamonds.

"They're bringing in jewelry from the '70s and '80s they don't wear anymore," he said. "They're following the news and see prices are high. They realize they have a little cache, and want to take it out of the vault."

Typically, gold is a safe place for investors to park their money, not something they buy to make money. It doesn't earn any interest, and because it's always sought-after, its value tends to be fairly stable. For example, when gold first reached $1,000 it was in March 2008, shortly after the collapse of investment bank Bear Stearns. Investors bought it up then because they feared for the stability of the financial system.