Those who beat a path to Howard Steinberg's precious-metals refinery in Philadelphia with old gold jewelry have done far better lately than those who went to their broker to buy...

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PHILADELPHIA — Those who beat a path to Howard Steinberg’s precious-metals refinery in Philadelphia with old gold jewelry have done far better lately than those who went to their broker to buy stocks of gold-mining companies.

That’s because the price of gold has jumped since May and in early December hit a 3-1/2 year high — but the stock prices of many of the precious-metals mining companies are far below their 52-week highs, and nearly every mutual fund in the sector was down for the year.

The situation is a classic warning to investors who might tend to mix up the two: The price of gold alone does not determine the price of gold-mine stocks, said Lynn Russell, precious-metals analyst at the Morningstar investment research group.

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Shares of some companies, such as Barrick Gold, of Toronto, languished because the companies locked in future prices for their gold at levels that were overtaken as the market price rose, she said. Meanwhile, South African companies were hurt by a stronger domestic currency.

But if you own the metal, this is a good time to sell that old jewelry and lock in some profits, said Steinberg, proprietor of Abington Metals Refining & Manufacturing. “I can’t predict that gold will go up much further,” he said.

The run-up in gold has brought a spurt in traffic to Steinberg’s door.

“I am starting to see customers I haven’t seen for years,” he said.

His company reclaims gold and other precious metals from industrial uses or jewelry.

Gold shows up at Abington in a variety of forms, all wholesale: discarded electronics brought in by scrap dealers, old wedding rings accumulated by pawnshops and shavings and scraps from jewelers.

Some of the customers had hoarded the metal, waiting for the price to go up, Steinberg said.

Abington buys the metal for eventual resale, or extracts and purifies the gold for the customer.

The gold in that new wedding ring in a jeweler’s case, for example, could have adorned the pins on a computer chip when it arrived at Abington.

By weight, gold constitutes less than 1 percent of the metals found in such electronics, Steinberg said.

The metal has grown pricier in recent months for a variety of reasons, but primarily because investors and governments around the world are using it to replace the weakening U.S. dollar as their safe-haven currency.

The dollar has declined in value versus the euro by more than 10 percent since June.

The run-up in gold also indicates spreading concern that the United States is living beyond its means, with hefty budget and trade deficits, and that inflation may be returning, said Jack Worrall, who heads the department of economics at the Camden, N.J., campus of Rutgers University. Traditionally, gold has been a hedge against inflation.

“Gold right now is a stronger currency” than the dollar, Worrall said.

But that can change if people perceive that U.S. policy-makers are taking steps to shore up the dollar, including reducing the deficit, he warned.

For now, the market is betting that the price of gold will climb higher.

“Gold is still undervalued” in dollar terms, said James Turk, a commentator on bullion and founder of GoldMoney.com, an online service that enables clients to conduct commercial transactions in grams of gold rather than paper currency.

Turk is gloomy over the dollar, saying this year’s spike in oil prices is a symptom of the currency’s weakness, not its cause. To capitalize on such bullishness about gold, a new exchange-traded fund began trading in November. StreetTracks Gold Trust is backed by gold bars stored in a warehouse.

Shareholders own the bullion without having to take it home.

Investors tempted by this new fund should ask themselves the same questions they would before buying any stock or mutual fund, Russell said.

Will it help them diversify? How does it fit into their long-term investment strategy?

Two rules of thumb are that precious metals should not be more than 5 percent of an investment portfolio and they should be considered long-term investments, she said.

Don’t buy just “because it is the hottest sector with great recent returns,” Russell said.