From the Bloomberg.com

GOLD - It's a gold rush as savers sock the bars away
By: Tavia Grant

Don Carlson has worked at Albern Coins & Foreign Exchange Ltd. in Calgary for more than a decade and, with the small exception of some pre-millennium panic buying, he's never seen so many customers carting off silver bars and gold coins.

"I've been in the business since 1991 and these are new highs for me, for both metals," the general manager says.

He's not the only one surprised by the growing appetite. In Ottawa, silver demand at the Royal Canadian Mint tripled in the first quarter. Kitco.com, a global gold dealer based in Montreal, has hired 10 new salespeople to take calls, while another distributor, based in B.C., is busy shipping coins across the country.

Rising geopolitical tensions and record oil prices are boosting the allure of precious metals, sending gold to its highest level since 1980 and silver to a 23-year high yesterday.

But it's not just exchange-traded funds or mining company shares that are popular. Canadians -- and investors around the world -- want the real, physical stuff.

In Calgary, Mr. Carlson is seeing huge interest from middle-aged and older people who have cash on hand and want to park it in gold and silver.

"We're seeing a lot of new faces," he said. "It's basically cash-and-carry. People like to have it in their hands."

Like other dealers, Mr. Carlson says silver demand is particularly strong. Sales of 100-ounce silver bars are surging and, at $1,692 a pop, many customers are buying several bars at a time. Clearly, silver prices that have already surged 58 per cent this year aren't deterring clients. Coins are also selling at a steady clip, he said.

While Albertans may be the biggest buyers of gold and silver these days, interest is growing across the country.

At the 98-year-old Royal Canadian Mint, investment demand for silver Maple Leaf coins more than tripled in the first quarter while demand for one-to-10-ounce gold bars doubled, said David Madge, the Mint's executive director of bullion and refinery services. He expects silver sales this year will be the best in a decade.

You know commodities are hot when people are pawning their old gold and silver trinkets to the Mint.

The Mint's recycling business, which buys old jewellery or silver flatware from individuals and turns them into coins and bars, has soared in recent months in lockstep with the run on commodities prices. Thus buyers of Canadian gold coins can't be certain whether they're derived from Aunt Bessie's wedding ring or come fresh from the mines.

Kitco.com, the world's largest Internet-based bullion dealer, knows this better than most. It added about 10 salespeople to its desk earlier this year to field floods of incoming calls.

Investor interest has soared for several reasons, said Jon Nadler, Kitco.com's investment products analyst. Demand in China and India is growing, while supply is dwindling. Worries about a decline in the U.S. dollar are mounting. Energy prices are soaring and tensions in Israel and Iran are rising.

Those factors are prompting more people to see gold as a hedge in their portfolio, he said.

"It's very, very strong and across the board, and not just in Canada," he said. "People are feeling more comfortable with holding gold than they had before."

In B.C., Martin Levy is managing director of the country's largest direct distributor of Maple Leaf coins. His company, Border Gold Corp., is seeing everyone from plumbers to bankers adding precious metals to their holdings.

"People in the trades, who have their own small companies, you see them buying and putting 5 to 10 per cent of their portfolio in gold," he said. At the same time, "a lot of business people, with higher income, are putting high hundreds of thousands or even a million or two million into gold."

Gold prices soared $4.50 (U.S.) to reach a 25-year high yesterday, closing at $623.30 an ounce, while silver jumped to $13.78 an ounce.

Midas touch

Not content with precious metals futures, exchange-traded funds or mining stocks, more and more investors are opting for the feel of solid gold and silver bullion in their hands. The demand has been a boon for dealers like Don Carlson of Albern Coins & Foreign Exchange in Calgary, as well as the Royal Canadian Mint.

200 - PERCENTAGE INCREASE IN DEMAND FOR THE ROYAL CANADIAN MINT'S SILVER MAPLE LEAF COINS IN THE FIRST QUARTER

47 - COIN SELLER BORDER GOLD'S EXPECTED PERCENTAGE INCREASE IN GOLD AND SILVER SHIPMENTS BETWEEN THIS YEAR AND LAST YEAR

100 - PERCENTAGE INCREASE IN DEMAND FOR THE MINT'S SMALL GOLD BARS IN THE FIRST QUARTER

$1,692 - GOING RATE OF A SINGLE 100-OUNCE SILVER BAR