The new gold rush is on.
The price of the precious metal is soaring, hitting a record $1,119 an ounce on Wednesday - confounding market analysts who thought there was no way gold would remain so expensive when it first cracked the unheard-of $1,000 mark last year.
Commodities including gold have been rising as investors look for safe havens with the dollar dropping to 15-month lows.
Low rates tend to weaken currencies including the dollar, encouraging investors to put their money in higher-yielding assets like gold. Investors also use gold as a hedge, not only against the falling dollar but also against inflation, which economists don't see as a threat right now. The remarkable run has implications far beyond savvy investors. More than 100 people a day now come to sell their gold at Ernest Perry's antique and estate jewelry store in Charlotte, up significantly in recent weeks.
Typically, gold is a safe place for investors to park their money, not something they buy to make money. It doesn't earn any interest, and because it's always sought after, its value tends to be fairly stable.
For example, when gold first reached $1,000 it was in March 2008, shortly after the collapse of investment bank Bear Stearns. Investors bought it up then because they feared for the stability of the financial system.
This time is different. Investors - think of them as the '09ers - are buying gold to protect themselves against the falling dollar.
Currencies are weak investments around the world because of record-low interest rates. Foreign banks that hold substantial amounts of U.S. debt, such as China's, want to diversify their holdings.
News earlier this month that India's central bank bought nearly $7 billion worth of gold from the International Monetary Fund triggered a frenzy of gold buying.
The surge has been remarkable. Gold is up 7 percent just this month, and 26 percent for the year. Some forecasters see it going to $1,200, $1,500 or beyond - unless the buying frenzy comes to a halt.
Some analysts are panning the gold speculation.
"You just don't see increases like this over the short term" that last, says Steve Condon, director of investor advisory services for Truepoint Capital in Cincinnati. "This isn't materially different from gambling."
For the most part, though, demand for gold is coming from investors and speculators, not from people who actually want to use it. Demand for gold for jewelry and for industrial and dental uses was already falling during the second quarter, according to the latest data available from the World Gold Council.
And of course, there's no guarantee the bubble won't burst.
Gold prices could fall when optimism about the economy takes hold again, as happened briefly the first time gold reached $1,000.
If that happens, the damage could be long-lasting: Gold reached $850 an ounce in 1980, then took 28 years to return to that level. (Gold's peak in 1980 is about $2,300 in 2009 dollars.)
Anyone who's not sure whether this is a good time to buy can take heart from a Goldman Sachs forecast on Wednesday that said gold prices could reach $1,200 by year's end.