New Orleans resident to hold more gold

Days after famed Lehman Bros. bank announced its bankruptcy in September, Blanchard and Co. Inc., the largest precious metals retailer in the country, was breaking company sales records. Blanchard sold more gold in 60 days after the Lehman collapse than it had in the preceding three years combined, an executive for the firm said.

"I think what was happening was that people were motivated by fear at that point," said David Beahm, vice president of economic research for the New Orleans company. "They wanted to have an asset they could hold in their hand and that wouldn't go to zero overnight."

Blanchard customers, it seems, were not alone. Demand for gold and silver have been increasing nationwide. The U.S. Mint sold four times as many American Gold Eagle coins in January 2009 as it did in the same month a year ago.

Worldwide economic woes are driving that demand, said Barry Stuppler, president of the American Numismatic Association. Gold, among the most liquid of assets, is seen by some investors as a hedge against inflation and a safe bet in perilous economic times, Stuppler said.

The price of gold ended last year up 5 percent compared with its close in 2007. It was one of the few investments to end the year in positive territory. After rising sharply last year and surpassing $1,000 an ounce to hit an all-time record price, it recently has started to pull back some.

"Before the financial crisis in September, most of the people looking to invest in gold were looking to diversify or wanted gold for long-term appreciation," said Barry Stuppler, who also is president of Barry Stuppler & Co., which specializes in rare coins and precious metals. "The majority of people now looking for gold want to get out of paper money."

source: www.nola.com