The business of buying and selling gold coins has jumped about 30 percent at Classic Coins Hawaii Inc. as gold prices last week reached their highest levels in nearly 18 years.

The price of an ounce of gold was $486.90 on Thursday — the highest close since January 1988. Gold prices ended the week slightly down, at $486.20.

With some analysts predicting that gold prices could reach $500 an ounce by the end of the year, Classic Coins owner Douglas Ho said, "People are calling in looking to sell. And I've got people looking to buy."

The most popular items in Ho's inventory are one-ounce, mint-condition American Eagle coins, which are selling for more than $500. But one-ounce Canadian, Chinese and South African gold coins also are moving, Ho said.

"Gold is a haven for political and economic chaos, and we have a lot of flash points across the world — terrorist attacks in the Middle East and riots in France," Ho said. "You've got bombings and terrorist attacks in Iraq, Jordan and Iran, and North Korea with its nuclear capabilities threatening worldwide stability."

Demand for gold coins, bars and bullion-backed shares rose 56 percent in the third quarter, according to a report last week by the World Gold Council.

"Investors are gravitating toward gold," said Tom Boustead, an analyst for Refco Inc. in New York. "Europe doesn't look terribly attractive, and the U.S. still has the current account-deficit problem. That forces interest in hard assets."

Investors and jewelers bought $12.5 billion worth in gold, up 7.6 percent from a year earlier, according to the London-based World Gold Council. Jewelry demand accounts for 73 percent of gold consumption.

But Don Medcalf, the owner of Hawaiian Islands Stamp & Coin, said he hasn't had any increase in activity for gold coins or gold bars, which he buys and sells in increments ranging from an ounce to a tenth of an ounce.

"I haven't seen any jump," Medcalf said. "If anything, it's probably less. The international market may be going nuts, but people in Hawai'i are still yawning."

Medcalf has seen the price of gold jump at the end of each of the last three years, then decline a month or two later.

"It seems like the end of every year it goes up to $450 or more — to an almost record high," Medcalf said. "Then it goes down by the beginning of the year."

Elizabeth Rapalee, part of the family that owns Kamaaina Metals, just finished purchasing a set of gold chains from a customer last week — just one transaction in what Rapalee called a "steady" stream of business since gold prices have risen.

"We have our ups and downs, depending on the different times of the month," Rapalee said. "During the opposite weeks of paydays, people come in to sell their stuff for extra money. And we have people who come in all the time to buy."

On those off-payday weeks, Kamaaina Metals will consider buying everything from broken gold jewelry to gold dental work, all of which is shipped to California to be melted down, Rapalee said.

"People," she said, "will bring in everything."

Reach Dan Nakaso at dnakaso@honoluluadvertiser.com.