Phil Goldsmith: THERE'S BILLS IN THEM THAR GOLD

NEW YORK -

For what is normally a sleepy month, there are so many customers at the Gold Standard, a New York company that buys jewelry, that it feels like Christmas in August. Uncle Ben's Pawn Shop, in Cleveland, has never seen a rush like this.

Welcome to the new American gold rush. The price of gold is on a remarkable run, setting a record seemingly every other day. Stomach-churning volatility in the stock market this month has made investors covet gold that much more.

Some want it as a safe investment for turbulent times. What worries some investors is that many others are buying simply because the price is rising and they want to make money fast.

"Is gold the next bubble?" asks Bill DiRocco, a golf-company manager in Overland Park, Kan., who shifted 10 percent of his portfolio earlier this year into an investment fund that tracks the price of gold. He stopped buying because the price kept rising.

In October 2007, it sold for about $740 an ounce. A little over a year later, it rose above $1,000 for the first time. This March, it began rocketing up. Yesterday, it traded above $1,793 an ounce, just shy of last week's record of $1,801.

Meanwhile, stocks, despite rising sharply in the last two-and-a- half years, are only slightly higher in price than they were a decade ago. Since hitting a record-high in October 2007, the Standard & Poor's 500 index is down 23 percent.

Gold hits a sweet spot among the elements: It's rare, but not too rare. It's chemically stable; all the gold ever mined is still around. And it can be divided into small amounts without losing its properties.

Ultimately, though, gold is valuable because we all agree it is. It was used around the world as a currency for thousands of years, and then it gave value to paper currencies for a couple of hundred more.

Now, in a time of turmoil, from the credit downgrade and debate over raising the debt limit in the U.S. to the growing financial crisis in Europe to worries of slow growth across the globe, gold is dazzling investors.

Peter Hug, director of the precious metals division for Montreal-based Kitco, one of the largest dealers of precious metals, said that until the U.S. tackles its debt and deficit problems, there's no limit for the price of gold.

"As long as people are terrified that their purchasing power is going to be eroded, gold goes to $3,000 an ounce," Hug said.