LONDON --- A few miles and a world away from London's financial district, 42-year-old Sadha Kaur walked into the gleaming stores of RPS Jewelers in a grimy west suburb to buy a bangle for her daughter.
"I come in every now and then to buy her some jewelry for the day she gets married," she said. "It's better than buying handbags or shoes all the time -- gold keeps its value and they can always sell it if they are stuck."
South Asian women have owned gold for generations, as ornament and insurance, a valuable cache to be used if disaster struck. For a brief time last year, the old-fashioned attitude seemed a smart investment strategy.
This past fall, as banks in Europe and America teetered on the brink of collapse, house prices went into free fall and stock markets slumped, gold's value soared as it took on its age-old role as a safe haven in times of trouble.
One of London's most established gold bullion dealers, ATS Bullion, had lines outside its offices tucked away by the entrance of central London's Savoy hotel. Another bullion dealer, Baird & Co, said business jumped 40 percent in the same period, and it was inundated with so much demand for gold bars that it could take orders only from its best customers.
But in the past six months, the price of gold in U.S. dollars has fallen by 30 percent. It soared over $1,000 per troy ounce, the traditional unit of weight for precious metals, last March but never hit those levels again. Even in October, when gold fever was again rising, the price hovered around $980 and is now around $850.
"The strengthening dollar masks how well gold is doing, but investors have also been put off by the fact that gold is too illiquid an asset. You can own a bar but it will take a while to turn it into the cash you need to pay off debts," said Matthew Turner, an analyst for VM Group, a commodities research group.
The price of gold has declined in dollars with that of other commodities, and has been pushed down by hedge funds that sold their gold holdings to raise cash in September and October. But in British pounds it is still at an all-time high, at 560 pounds per troy ounce compared to 450 pounds a year ago because of the recent dramatic slide in the British currency's value.
Gold, the metal the wealthy around the world have hoarded for centuries, is recognized and valued all over the world, can be stored in underground vaults or in your wardrobe, and does not rely on complex financial instruments.
"In Roman times, one gold coin could be exchanged for a toga. Now, its value is about 400 pounds, what it costs for a decent suit," said Paul Tustain, the chief executive of Bullionvaults.com, an online gold trading company. "Gold holds its value over history like nothing else. In times of turbulence it's a safety raft."
The price of gold is still a lot higher now than the low of $250 in 1999, when investors bought stocks and houses, and kept money in high interest accounts. House prices are still falling, equities are volatile and low interest rates make saving an unattractive option.
"Gold has always been about wealth preservation, not wealth creation," said Mark O'Byrne, the director of Gold and Silver Investments, a precious metals broker. "In good times, there are far better ways to make money, but in bad times, holding gold coins and bars is a way of making sure your wealth doesn't disappear altogether."
Mr. Turner agreed. "You could argue that gold would have been the best investment in the last year, but pesky governments kept rescuing the banks and protecting other forms of investment," he said. "That's one big difference between now and the 1900s -- that governments can and will bail out big institutions. "
In RPS Jewelers, at a corner table strewn with coffee cups and velvet jewelry boxes, 32-year-old Jaspreet Singh pulls out glittering ropes of gold necklaces hung with sovereigns and bracelets that glint in the light. Her husband's family gave them to her when she was a 19-year-old bride. She has not worn them since her wedding day, but wants them valued just in case.
There are better ways to invest in gold. Jewelry is not usually considered a sensible way to invest, as jewelers charge a premium for workmanship that makes a gold necklace weighing 5 grams cost more than a 5 gram gold bar.
But Mr. Singh has two sons to provide for and a family business that looks more shaky than it did a year ago. She's still grateful to have this ancient, durable safety net in difficult times.