Tuesday, August 16, 2011 – 12:00 AM
By Mirela Iverac
Gold was flying off the shelf in midtown Manhattan as the price of the precious metal reached an all-time high amid a wild week on Wall Street.
“We’ve done the most business that we’ve done in any single week,” said Isaac Kahan, president of Bullion Trading LLC, which specializes in selling and buying of gold and silver. “It was about the four times the normal volume.”
Gold reached a high of $1,813 an ounce last Thursday. But on Monday, as stock markets recovered, it was down to $1,766 on ounce. And although experts say fear was driving gold prices — not the markets — there were no signs that the demand for gold would abate, or that its price would significantly drop in the long term.
Kahan, who’s been in the business for 30 years, said his clients were forking over between $200 and 350,000 — his largest transaction — to buy gold last week. His most popular products have been 1-ounce bars and the Gold American Eagles coin.
“People are saying they’re basically worried about the dollar, and they’re just worried about the political climate,” Kahan said of his customers.
The downgrade of the U.S. credit rating, fragile economic recovery, as well as growing economic problems in Europe have resulted in concern that seized the market and accounted for its wild swings, experts said. Consequently, investors turned to gold, which is perceived as a safety instrument in time of turmoil.
“Fear of future inflation, fear of currency debasement and basically just fear of default and the unknown,” said Matthew Zeman, a strategist at Kingsview Financial, explaining what was causing the demand for gold.
Frank McGhee, head precious metals trader at Integrated Brokerage Services LLC, said he expected the money to continue to move into the precious metals, and the price of gold to rise up to $1850 an ounce.
“I think it’s still going go higher,” Zeman said of gold’s prospects. “And I don’t think you’ll see buying interest dry out to any significant degree along the way.”