Investors who have forsaken shaky financial markets for the safety of gold must feel a little bit like prospectors.
As the worst recession in at least a generation spreads, so too does the clamor for gold bars and coins, assets less likely to go up in smoke like so many derivatives and asset-backed securities.
“I’ve never seen a case where demand was so high and supply was so short,” said Chicago coin dealer Harlan Berk, who has been in the business 44 years.
Spikes in demand for gold coins this year appear to run parallel with the mounting woes on Wall Street.
In August, as the Federal Reserve pumped $62 billion into the U.S. banking system and rejected requests for mortgage finance giants Fannie Mae and Freddie Mac to take on more debt, sales of the popular American Eagle coin were suspended for a week.
The U.S. Mint was unable to get enough gold blanks from suppliers to match demand, Mint spokesman Michael White said.
In late September, when a massive bailout for the nation’s biggest banks failed, sales of the American Buffalo coin were suspended until Nov. 3 because of shortages.
Yet even before the full extent of the financial crisis was known, investors had begun to load up on gold and other assets that could be held in the hand.
