Gold capital booms, but eyes downturn

By Adam Tanner

ELKO, Nevada (Reuters) - When Elaine Barkdull Spencer's two sons were growing up, she vowed they would never work in gold mining, because of its capricious cycles of boom and bust.

These days, both sons are in the industry and Barkdull Spencer isn't complaining. One of her sons, who is 27, earns $100,000 a year and the other, who is 25, makes $90,000.

It is hard to outshine gold in rural northeastern Nevada. With gold at record levels on a weak dollar, inflation concerns and U.S. economic uncertainty, Elko (population 22,000) is enjoying a boom.

"We're at the peak of our cycle," Barkdull Spencer said.

Long overshadowed by Nevada's famed casino capital Las Vegas and its second city Reno, the Elko region (population 40,000) has become North America's top gold producer without generating much fanfare elsewhere in the United States.

By contrast, Las Vegas 470 miles to the south has lured hundreds of thousands of newcomers in recent years hoping to strike it rich in one of the American West's fastest growing cities. Yet the Vegas mood has soured amid tumbling home prices a glut of "for sale" signs hitting the street.

About 60 percent of Elko people work for the mines or their subcontractors, putting good, steady money in their pockets. Houses are in short supply, although cheaper homes still sell for less than $200,000.

"We're victims of our success right now," Elko Mayor Michael Franzoia said in an interview. "There is not enough housing to meet demand."