This year's bank failure caused a surge in demand for gold bars and coins.
As people sought ways to hedge their investment against inflation, the demand for gold was already on the rise. With a limited supply of gold, it provides stability for a tangible asset.
Then, a string of bank failures, including the demise of Silicon Valley Bank earlier this year, added to the momentum.
It was a wakeup call to many people, said Jonathan Rose, CEO of Genesis Gold Group, a precious metals firm in Beverly Hills, California. which he could attest to since he had money deposited at Western Alliance, which came under a significant amount of stress in the wake of SVB's collapse.
My money is not as safe as I thought it was in the banking system. As people searched for tangible properties of value that 'can't evaporate,' Rose said, interest in owning gold surged.
In May, gold prices hit a record high of nearly $66,000, according to data Goldprice.org.
Data from the World Gold Council supports what Rose witnessed.
In the second quarter of the second quarter, demand for gold bars and coins in the U.S. hit a 13-year high, according to an August report published by the Council.
However, demand has been slowing down, but it will 'probably pick up again should any signs of banking instability reemerge and on approach to the 2024 presidential election campaigns,' according to the report.
Even though you can invest in gold and other precious metals without physically owning them, people tend to prefer 'having the currency in their hands,' she said.
That's because if you invest in a gold ETF, 'it's still tied to the market', he said. If the market collapses, you'd be exposed to it and face some financial losses as a result.
Many of his clients have buried the gold he's sold them in the ground, he said. One even stored it in an empty paint can in their garage. Other people who prefer to keep gold within their own roof store it in a gun safe or floor safe, he said.
For added assurance, you can take out an insurance policy or keep it in a safe deposit box at a bank, but most of his clients opt not to.
To invest in IRS-approved physical gold in their tax-deferred investment accounts by law, individuals must keep it in a bank or with a non-bank trustee.