Q. I'm interested in buying some gold that I can hold on to for the long term and perhaps eventually give to my grandchildren. I've tried a couple of places in the telephone book and only got answering machines. Can you tell me who sells gold in Hawai'i? C. Roy, Hawai'i Kai.

A. It sounds as if the gold bug has bitten you.

Local coin dealers said this happens every time precious metal shines in the spotlight, as it has been in the past year as some people buy it as a hedge against inflation and because of worries about chaos in the Middle East.

The closing price of an ounce of gold jumped 63 percent between Aug. 23, 2005 and May 12, 2006, when spot prices reached $714.80, according to Bloomberg L.P. data.

That had many people talking about owning gold at a time of uncertainty. Others have looked at it as an investment vehicle.

But since it's peak in May, gold's lost some of its luster, with an ounce declining to $622.95 in New York trading yesterday.

"Usually when gold goes up, the masses, or non-collectors, start buying," said Don Medcalf, owner of Hawaiian Islands Stamp & Coin on Bishop Street.

He said people should be wary of sellers who talk about gold prices heading higher. "It's like anything else. No one knows what stocks are going to do, what real estate is going to do."

Medcalf is one of several coin dealers in the state where you can buy and sell gold. Assuming you don't want other types of gold investments such as stocks of mining companies or mutual funds or exchange-traded funds that try to track the price of gold, you'll probably wind up at one of these dealers.

There you'll likely find gold bars and coins in a range or prices that are linked to the price of gold plus a premium. Coins are popular with buyers and are broken into two broad categories: those that are deemed collectible, and those that are classified bullion coins, which are priced closer to gold prices you see in newspapers and on television.

The first category can include rare coins and dollar-coins that are more than 100 years old. A $20 gold piece minted 100 years ago can go for about $1,000.

The second includes some of the more familiar coins such as South Africa's krugerrand and the U.S. American Eagle.

Vince Vento, proprietor of Ali'i Coins in Downtown Honolulu, said the premium charged over market price for American Eagles has run to 6 or 7 percent or more. Krugerrands trade closer to gold's market price, he said.

Do your homework before you buy. It's not overwhelming, and learning about different, types of coins, gold content, authentication, proofs and troy ounces may help in deciding where and what to buy. Other considerations include whether you are going to insure your coins and whether you'll be keeping them in a bank safety-deposit box.

You might also bounce your thoughts off a trusted investment adviser to get his ideas on gold and where to purchase it.

There are also sellers of gold on the Internet, including the U.S. Mint.

Do you have a question about personal finance, taxes or other money matters? Reach Akamai Money columnist Greg Wiles at 525-8088 or gwiles@honoluluadvertiser.com