"This is the Twilight Zone," explained gold trader Ricard Schwartz to one of his numerous customers who was buying gold over the phone. "There's no rhyme or reason to it at all."
That was Schwartz' answer to a question about the skyrocketing price of gold that has propelled hordes of investors through the doors and over telephone lines of precious metal brokers such as Deak-Perera in downtown Washington, one of the largest retail gold brokers in the country.
As soon as Schwartz closed a sale of 20 Canadian coins, the phone rang again. And again. And again.
"Yesterday I wasn't allowed to yawn," Schwartz joked during a couple seconds of peace. "Today I can yawn, sneeze, cough . . . '" Then the phone rang again.
Since the price of gold has risen so fast, the Pits at Deak, where precious metals are bought and sold, is quickly living up to its name. From 9 a.m. to 5 p.m., five sales persons answer calls from buyers all over North America investing in gold, silver, platinum and paltadium.
But because of recent frenzied activity in gold, volume has increased at least three-fold in the Pits, according to Glen Kirsh, manager of the precious metals department. Each sales person handles about 150 calls a day now, he said, and no one knows when it will slow down.
Deak also sells 24-carat gold jewelry and coins, in which business also was brisk yesterday. Customers ranging from those buying one South African Krugerrand, which contains one ounce of gold, to those buying $25,000 in gold certificates crowded the small lobby at 13 and K Sts. NW.
"I've hearing a lot about the gold prices, and I just wanted to buy a coin," said a lawyer who declined to be identified. Ahead of him, three men argued in a foreign language and pointed at the array of gold coins in Deak's glass case.
"I like the look of the jewelry, and it's good for beating inflation," said Margaret Cohen, a consultant, who was eyeing the 24-carat gold necklaces and pendants that are attracting buyers not only with their good looks but with their investment potential.
Between 90 percent and 95 percent of the trading is done in the Pits, the 12-by-12 foot cubicle where sales persons take phone orders all day. As one was about to close a gold sale, another yelled, "Gold is going up." The price had just increased from $374 to $376.
Two computer-linked television screens in the Pits usually display the current prices of precious metals, but for most of yesterday they were inaccurate, so prices were yelled across the room instead.
"The market changes so fast, I can't put the new prices up," said Thomas Scarpa, sales supervisor.
Most of the sales were in precious metal certificates, paper recording a purchase which actually is stored in a Swiss or Delaware bank, and Kruger-rands.
Two years ago, Deak's clients were mostly Europeans and persons from Latin America who had experienced inflation before and knew about buying gold as a hedge, Kirsch said. But now, many sophisticated investors who were heavily into stocks or bonds are turning to gold, as well as the man in McKinley, Tex., who yesterday bought one $400 gold coin, and the Topeka, Kan., professor who bought 20 of them over the phone.
"I'm sick of this. I'm going home," complained a saleswoman who sauntered into the Pits and out again.
"That's all right," Kirsch reassured her. "Tomorrow, it will be better."
How does Kirsch know? Smiling slowly Kirsch said, "I don't.