YOU COULD BUY an ounce of gold, a year ago, for a mere $210. By the beginning of the summer, it was up to $280. Now the price is hovering around $340. The reason for a rise seemed clear enough a year ago, when the dollar was falling against the other major currencies. But this summer the dollar has been fairly stable. In spite of it, the flight to gold continues -- demonstrating once again that when faith in currency is eroded, rebuilding it is slow work.

For some of the buyers, the grab for gold is a way to avoid money altogether -- and the bank accounts in which it is commonly kept. Much of the current demand for gold comes from the Middle East, where oil wealth is in the hands of people who have been brooding on the events in Iran. Who knows which country might be swept up next in revolution? A frozen bank account is a deeply distressing possibility. The solution is a discreet package of gold bars tucked away in a bank vault in some distant country where political life is less interesting and more predictable.

But a lot of the current buyers are Americans who are simply looking for protection from inflation that shows no sign of abating. They are demonstrating one of the most severe and dangerous costs that inflation imposes on an economy. It drives wealth into unproductive investments like overpriced houses, antiques, paintings, jewels and, of course, gold. This effect is an important part of the explanation of poor productivity in times of high inflation.

To the U.S. government, the rising price of gold is something of an affront, a vote of no confidence in the dollar. But for the moment there is nothing the administration should do about it -- except, obviously, to keep struggling to get the inflation rate down.

In the meantime, it will continue to sell gold as part of its strategy to support the dollar. The administration has a well-founded aversion to remonetizing gold. But the South Africans have been driving a brisk trade with their Krugerrand, and now the Canadians are about to begin selling a gold coin to be called the Maple Leaf. The official gold sales here have been limited to the standard 300-ounce bar that currently goes for something over $100,000. Congress has been getting a lot of mail from people who want pieces of the action, but smaller pieces. As a compromise, next spring the United States will begin selling gold medallions -- not coins, mind you, but medallions -- in smaller denominations for those who, like the traditional French peasant, like to keep a reserve tucked into a sock.

The price of gold constitutes an opinion poll among those people who have cash to spend, or to keep or to hide. As a poll, it says that they are getting more uneasy about the stability of the societies in which they live.