They buy gold....and lots of it.
According to this report from Reuters Super Rich Investors Buy Gold By The Ton
Fears of a double-dip downturn have boosted the appetite for physical bullion as well as for mining company shares and exchange-traded funds, UBS executive Josef Stadler told the Reuters Global Private Banking Summit.
"They don't only buy ETFs or futures; they buy physical gold," said Stadler, who runs the Swiss bank's services for clients with assets of at least $50 million to invest.
Of course this is hardly a surprise given a 30% + increase in price in 2010 as you can see in this chart 
 
And the fact that gold has been going up for ten straight years

UBS is recommending top-tier clients hold 7-10 percent of their assets in precious metals like gold, which is on course for its tenth consecutive yearly gain and traded at around $1,314.50 an ounce on Monday, near the record level reached last week.
It's hardly a surprise that those Swiss banking gnomes are recommending gold as they are sitting on piles of it buried deep in vaults under Zurich's Bahnhoffstrasse.   

"We had a clear example of a couple buying over a ton of gold ... and carrying it to another place," Stadler said. At today's prices, that shipment would be worth about $42 million.

But seriously, where does an investor store $42 million in gold? Well I guess that if you can afford that much gold you can afford to build your own private Fort Knox as well.

On the other hand
Billionaire financier George Soros, echoing comments from investment guru Warren Buffett, last month described gold as the "ultimate bubble" because it is costly to dig up and has no real value except its market price.
But a rising price for the precious metal has in itself generated more and more demand from investors looking for a way to hedge against a fresh recession. Gold bears no yield and is uncompetitive in an environment of rising interest rates.

Gold bubble?  Maybe, but probably not yet.
My recommendation...instead of buying ETFs buy gold jewelry, the asset that you can wear.
Just don't pay retail prices.  Buy at a price close to the intrinsic value.

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