MADELEINE BRAND, host:

And back by popular demand, gold. Gold is hot these days. A few weeks ago, the price hit a 26-year high, $729 an ounce.

ALEX CHADWICK, host:

It's down about $100 since that today, but the high prices have triggered activity in gold markets everywhere and it's not just wholesale investing. In Alaska, there may be gold in "them thar hills" but prospectors can't even get out to find the gold, because they can't get those old fashioned pans and picks right now. The stores are sold out.

BRAND: Well, is it bad news for the rest of us, this renewed interest in all things gold? Many economists watch gold as an indicator of how the economy is doing, and usually when gold is hot, the economy is cool. Investors have lost confidence in the stock market and in the dollar. Gold historian, Peter Bernstein.

Mr. PETER BERNSTEIN (Historian, Author): Gold occupies a unique place in the world, really. It doesn't tarnish, and it doesn't waste with time. And so, through the centuries, gold has been where people went when they were afraid about everything else.

(Soundbite of coin counting)

BRAND: At the Long Beach Convention Center here in southern California, people are in town to buy and sell gold coins. Dealer John Gould(ph) is from Arizona. He says it's been a generation since there's been such a gold fever.

Mr. JOHN GOULD (Gold Dealer): In Baltimore, we had a coin show, one of the biggest coin shows of the year, and people were lined up. We couldn't wait on everybody. That's how many people we had in front of our table wanting to buy gold.

Mr. JIM MELNICK(ph) (Gold Buyer): I think it's going to be over $1000 worth in a year.

BRAND: Jim Melnick is from Alberta, Canada. He makes the trip south three times a year to buy gold and right now, he's buying as much as he can.

Mr. MELNICK: I think you can make more on percentage by buying gold and silver than you can invest in anything else, really.

BRAND: It's not just fear of the market and the weak dollar that's driving a run up in gold prices. Gold expert, Peter Bernstein, says other precious metals like copper and silver have also become more expensive because of increased demand. Demand for gold is the highest in India. Indians buy more gold than anyone else.

Mr. BERNSTEIN: Indians have always kept their fortunes in gold form and usually in the form of jewelry. With the prosperity that's been spreading in India in the last couple of years, India has become a much bigger player in the gold market than it was in the past.

BRAND: There is no reason to panic, he says, and sell all you own to buy gold. Gold should be a hedge against your other investments.

Mr. BERNSTEIN: A hedge is a bet against your primary strategy. Because you hope that you're wrong in buying it, because if you're right in buying it, all your other assets are going to be in big trouble.

BRAND: But if that's the case, there is a silver lining.

Mr. BERNSTEIN: If everything goes to hell, the value of your jewelry will go up a lot also. If it doesn't go to hell, you can make yourself look beautiful. Transcript provided by NPR, Copyright NPR.