Gold Rush at Costco: Is Buying Gold Bars a Wise Investment?

Unusual Trend at Costco

Shoppers at Costco, known for its budget-friendly deals and iconic $1.50 hot dog and soda combo, have taken an unexpected interest in a new offering: 1-ounce gold bars. These gold bars, according to company officials, have been rapidly selling out online. Costco CFO Richard Galanti mentioned that they often vanish from the site within hours, with a limit of two per member.

Is Gold a Shrewd Investment?

The recent gold rush at Costco has sparked interest in the age-old question: is gold a wise investment? Experts weigh in, highlighting that gold can have a place in an investment portfolio. It is considered a safe haven asset, as it tends to perform well during times of market risk and uncertainty. George Milling-Stanley, chief gold strategist at State Street Global Advisors, recommends that gold should make up about 2% to 10% of a portfolio. It not only enhances returns but also reduces portfolio volatility, reducing risk.

The Pros and Cons of Physical Gold

While investing in gold has its merits, buying physical gold bars comes with its downsides. There can be a premium when purchasing and a discount when selling, making it necessary for gold’s value to increase significantly before breaking even. In this light, some experts recommend gold Exchange-Traded Funds (ETFs) for a more straightforward approach. ETFs allow investors to track gold’s price without owning physical gold. However, for some, having physical gold holds an appeal related to stability and recognition.

For some, gold isn’t just an investment but a psychological asset. It’s viewed as a hedge against inflation and economic instability. The emotional satisfaction of owning physical gold plays a role in its popularity.

Costco’s gold bars aren’t the only option. You can find gold bars on other major retailer websites, although they are usually offered by third-party sellers.
So, while gold bars at Costco may not replace pretzels in your shopping cart, they can be a unique and potentially valuable addition to your investment strategy.