Workmen at a refinery near Lake Lugano in the Alps cannot work fast enough to meet demand from the nervous rich for gold.
“I have been in the gold business for 30 years and I have never experienced anything like this," said Bernhard Schnellmann, director for precious metal services at the refiner Argor-Heraeus—one of the world's three largest.
Spot gold hit a record $1,030.80 an ounce on March 17. It fell below $700 in late October, partly because investors sold their holdings to cover losses in equity and bond markets hit by the credit crisis, and is now around $830 an ounce.
The trigger for the price to rise again could come from a much weaker dollar, making gold cheaper for holders of other currencies, and a renewed aversion to paper assets
In Switzerland, home to the world's largest private banking industry, demand for gold bars and coins shot up six-fold to 21 tons in the third quarter of 2008—more than in any other European country.
Though Switzerland is not a gold miner, it is home to some of the world's largest refineries, which process an estimated 40% of all newly mined gold.