Somewhere in a secure vault deep underneath New York City, the University of Texas now stores 6,643 bars of solid gold — worth close to $1 billion — as part of the school's $20 billion endowment portfolio.
See also: How safe are your savings?
And the university's investment managers aren't alone in their renewed fever for precious metals. Individual investors around the world, including many saving for retirement, continue to load up on gold and silver.
Investing in precious metals can be a risky proposition: After a rapid run-up, silver reached almost $50 an ounce in late April, then went into free fall. Today it's fetching about $37, meaning that lots of people lost heavily. And in past years, gold has had its up and downs.
Many precious-metal investors buy because they believe that long-term inflation is headed our way and that owning metals is the way to protect against higher prices.
Inflation fears are being fed by promises from Federal Reserve Chairman Ben Bernanke to maintain record-low interest rates to stimulate the economy and by his central bank's continued printing of more dollars.
Even as Bernanke was holding his first-ever press conference in late April, gold futures hit a new all-time high, with a contract for delivery in June — one of the standard measures of gold's value — reaching $1,531.70 an ounce during trading in Asian markets.
A hedge against inflation
Investors usually swarm to gold and silver in times of economic uncertainty. The thinking goes that precious metals have special ability to maintain their "store of value" if the nation's currency loses its value and prices head up.
"Our dollar is losing value," Peter Schiff of Euro Pacific Capital argued on CNBC recently. "There is a connection between the rising price of food, the rising price of gas and all the money that the Federal Reserve is printing. The government is not raising taxes. Instead they are creating inflation."
The Federal Reserve argues that with unemployment holding at about 9 percent and many factories operating at less than full capacity, there is plenty of time and room for the U.S. economy to expand before there's a long-term danger of inflation.
But gold bugs don't give much credence to the central bank's claims, and have continued to buy gold, pushing its price up. So far this year gold has gained nearly 8 percent and continues to trade close to $1,500 an ounce. The run-up extends a decade-long gain.
Next: What about silver? >>
Gold's allure has also been helped by a recent warning from the rating agency Standard & Poor's that it might eventually downgrade U.S. Treasury debt because of the continuing budget stalemate in Washington. And global jitters over the fighting in Libya and the potential default of European countries such as Greece and Portugal have helped the price, too.
Past gold booms have sometimes ended in collapse, to the dismay of investors. In January 1980, amid the turmoil of high inflation, the Islamic revolution in Iran and the Soviet invasion of Afghanistan, gold reached what was then a peak of $850 an ounce. It then dropped to the $300-to-$500 range for close to a quarter of a century. When inflation is factored in, it hasn't yet come close to that 1980 value — by some estimates, it would have to climb to $2,200 an ounce to do that.
What about silver?
While gold is traditionally used mainly for making jewelry and storing value as bullion, silver has a number of industrial uses, including, increasingly, in the manufacture of solar power cells. This can add to its appeal.
Speculative investor demand for silver has increased markedly over the past five years, according to RBC Capital Markets. In 2008, investors represented 5 percent of the total market for silver. In 2010, that had grown to 17 percent, RBC found.
The kinds of speculative bubbles from which silver's price came crashing down in recent days are becoming more commonplace as a new generation of hedge funds push selected kinds of assets toward the stratosphere with their purchases, then cash out when mom-and-pop retail investors get interested.
Bruce Zimmerman, chief executive officer of the University of Texas Investment Management Company, told CNBC television that he has been buying gold as a hedge against loss of value of currencies. "The concern is that we have excess monetary and fiscal stimulus," he said.
Unlike currencies, gold comes in a limited supply, and you can't turn on the printing presses and make more of it. That's what makes it so valuable.
Michael Zielenziger writes on business and the economy. He lives in the San Francisco Bay area.