Gold coin dealer Michael Kramer was greeted by ringing phones when he returned to work Monday at his basement office in lower Manhattan, south of the World Trade Center.
Phone service had just been restored as the area was opened for business for the first time since the terrorist attack last Tuesday that destroyed the center's twin towers. Customers were looking for gold coins, fearing a plunge in stock prices as trading resumed four blocks away on the New York Stock Exchange.
"We've sold approximately four to five times as many ounces in a few hours this morning as we've done in the last several months," said Kramer, head gold trader at MTB Inc. Given "what happened here, people feel the stock market is going lower, which it has, and a lot of them want a new vehicle to invest in."
The search for a safe place to invest rekindled interest in gold that had languished for years.
American Eagle gold coins containing 1 ounce of the metal were selling for US$304.50 Tuesday at MTB, up 7.2 percent from US$284 before the attacks. During the same period, gold futures traded on the nearby New York Mercantile Exchange have risen 5.8 percent to US$289.70 an ounce.
"We've seen a dramatic increase in sales in the past week, a 10-fold increase from the week before," said Rand LeShay, a senior vice president at A-Mark Precious Metals Inc in Santa Monica, California, the largest seller of American Eagle gold coins. "Other than sleeping, we've been relatively busy ever since" the Trade Center attack, he said.
Increased demand for gold coins already is appearing in government statistics. American Eagle coin sales so far this month have totaled 28,500 ounces, greater than any single-month sales figure this year, according to Matthew Kilbourne, a spokesman for the US Mint in Washington. There were 6,500 ounces sold in all of August.
Last year, the Mint sold 163,400 ounces of American Eagle gold coins, the lowest amount since the coins were introduced in 1986.
The allure of gold coins may be short-lived, said Christopher Holton, president of Blanchard & Co, a coin dealer in New Orleans.
"Last year, we backed off the gold market," Holton said.
"We think that gold as an investment has seen a change over the last several years, from which it's not going to recover," he said.
"We've seen stocks fall, we've seen oil prices triple. Everything that's supposed to be positive for gold. And gold has done nothing in response."
The Nymex last week said there were about 379,000 ounces of gold and 30 million ounces of silver stored in a vault at the Trade Center.
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