Demand sparks a modern-day gold rush

Gold is displayed in a window in New York City's jewelry district April 19, 2011.
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CHICAGO - Anxiety about the economy is sending a lot of people to the perceived safety of gold, and the price is soaring. This week, it closed above $1,500 an ounce for the first time.

These days, it seems gold is all around us, glittering as never before, CBS News correspondent Dean Reynolds reports.

With the U.S. economy sluggish, with turmoil in the Middle East, chaos in Japan and near bankruptcies in Europe, gold is attractive, luring small and big investors alike.

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"Gold is historically likened to a monetary metal and, more than that, a safe-haven asset," said Abraham Bailin, an exchange-traded fund analyst at investment research firm Morningstar.

A pricey asset.

In 2006, an ounce of gold cost $562. This week, the price settled at $1,503.80, a 167 percent increase.

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Demand for gold from emerging middle classes in China and India are also driving up the price. Indians, for example, are famous for their lavish gold-plated wedding celebrations.

The lure of that gilded price has not gone unnoticed on Main Street. So-called "cash for gold" parties are now proliferating.

In Lombard, Ill., Jackie West will be at one soon.

"I'm very curious to see what it is all worth," West said before gesturing to a ring. "This is gas in my car."

Others hit the local jeweler for a windfall, and business is brisk. At DaValle Jewelers, more than 50 percent of the customers come in wanting to sell their gold.

"The economic times, they need the money," co-owner Gary DaValle said.

People are digging through closets, dressers and purses as if they were treasure chests, DaValle said.

"A nice handful of gold would get you a $1,000 very easily," he said. "We don't pop fillings, but we'll take them."

But remember, gold prices usually heat up like this when the economy is heading south, so really it's in just about everyone's interest to see the price of gold go down eventually.

And that's no bullion.

  • Dean Reynolds

    Dean Reynolds is a CBS News National Correspondent based in Chicago.