By Jeff Seldin from Washington, DC
Every new piece of bad economic news and every plunge on Wall Street sparks fears that the worst is yet to come. As a result, many people are turning to one investment they feel they can trust. Gold chains, gold bangles and gold coins - all increasingly expensive.
Still, customers stream into a Vienna, Virginia, jewelry store, outside of Washington.
“I wanted to get a little pendant and a little chain,” customer Dia Majumdar explains.
At a time when many Americans are selling their gold for cash, Indian-born Majumdar is among the many Asian-Americans looking to buy - for herself and for something to pass on to her daughter and grandchildren. “And those of us who have bought the gold jewelry know that they have an asset to fall back on," she added. "I still have a lot of my gold wedding jewelry left and I know in the back of my mind that it’s there.”
May Jewelers caters especially to the Asian community. Vice president Vincent Nguyen says Mujamdar is not alone. “We have people who save up for months and just come in here and buy a one-ounce coin for investment,” he stated.
It is a big investment. A gold chain that cost $300 a few years ago now sells for $900 or more.
“A lot of our clientele believes in gold," Nguyen notes. "If there is a special occasion - it could be an anniversary, a wedding occasion - people buy gold.”
For lots of Asian-Americans, gold is a safe investment, a hedge against uncertain economic times. For others, the value is much greater.
“It’s psychological, isn’t it?" says Larry Shinagawa, director of the Asian-American studies program at the University of Maryland. "More than anything else, you have the sense of having something of lasting value in a world that is so transient and so much in turmoil.”
But Shinagawa says that cultural comfort is only part of the reason many Asian-Americans are snapping up gold and other precious metals.
“There has been about a 60 to 68 percent drop in the amount of wealth among Asian-Americans in a very short time period of only four years. Much of it is real estate,” he says.
It is not just Asian-Americans looking to gold to preserve their wealth.
Demand for gold has been rising worldwide, India and China leading the way.
And for many people, says Professor Anil Gupta with the University of Maryland Smith School of Business, gold remains less risky than many alternatives.
“If I look ahead at least over the next two, three, four, five years, the likelihood of volatility in world economies, in the stock market, it’s likely to remain high," Gupta says. "And in times of volatility gold is likely to be seen as a relatively safe haven.”
For now, that means brisk business for jewelry shops, like this one, where some customers are even passing on luxury items - like flat screen TVs - to get a little more gold. (VOA News)
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