Costco Is Seeing A Gold Rush. What’s Behind The Demand For Its 1-Ounce Gold Bars?

NEW YORK — Want to add something to your Costco shopping cart besides the 30 rolls of toilet paper? How about a gold bar?

The members-only warehouse chain has seen its 1-ounce gold bars sell out faster than discounted 170-ounce laundry detergent containers despite not being a typical retailer of precious metals.

CFO Richard Galanti stated last week during a company earnings call that the gold bars, which are sold exclusively online, are “typically gone within a few hours” of appearing on Costco’s website, adding that there is a limit of two bars per member. Wednesday, they were still sold out.

Gold bars are expensive, unlike other discounted items sold by the retail behemoth. Due to the bars’ unavailability on Wednesday, prices were not specified; however, multiple media outlets reported last week that the 1-ounce gold pieces, available in two designs, were selling for just below $2,000 each.

This is slightly higher than the current market pricing of gold, which was approximately $1,835 per ounce as of Wednesday afternoon.

Costco did not specify the number of gold nuggets sold recently or how often they are replenished. Wednesday, the Issaquah, Washington-based chain has yet to respond to a request for comment from The Associated Press.

Want to add something to your Costco shopping cart besides the 30 rolls of toilet paper? How about a gold bar?

Interest in Costco’s gold ingots will probably be around for a while. Although one or two ounces of gold will not significantly impact a portfolio’s diversification, experts note that investor demand for precious metals has increased in recent years and is likely to continue.

Nonetheless, it is necessary to evaluate investment opportunities. Here are some expert opinions.

Why is there a demand for gold?
According to experts, purchasing gold is frequently motivated by feelings of uncertainty.

According to Jonathan Rose, CEO of precious metal broker Genesis Gold Group, recent bank failures, inflation, and concerns about the U.S. dollar, among other factors, can prompt some individuals to seek alternative places to deposit their money.

David Wagner III, head of markets and equities at Aptus Capital Advisors, added, “If someone goes out to buy gold, they believe there is some type of structural instability in the market and/or the government.”

Want to add something to your Costco shopping cart besides the 30 rolls of toilet paper? How about a gold bar?

According to Rose and others, gold can diversify and balance your investment portfolio and mitigate future hazards.

“People seek a safe haven… to safeguard their wealth.” “And gold sort of checks all those boxes,” said Rose. People may place precious metals “in a safety deposit box or a retirement plan, such as an IRA or 401(k)… to safeguard their assets while they observe market conditions,” he said.

However, not everybody agrees. Wagner asserts that gold is “one of the worst things you can ever own.” Among the disadvantages, he argues, is that gold is not the inflationary hedge that many believe it to be, as inflation has occasionally outpaced gold in recent decades, and that “there are more efficient ways to protect against the loss of capital,” such as derivative-based investments.

The Commodity Futures Trade Commission has also cautioned investors against gold investments. According to the commission, the price of precious metals rises as demand increases, so “when economic anxiety or instability is high, the people who typically profit from precious metals are sellers.”

If you decide to invest in gold, the commission and others note it is essential to educate yourself on safe trading practices and to be wary of potential schemes and counterfeits on the market.

Gold for December delivery fell $6.70 per ounce to $1,834.80 by Wednesday’s market close. For other precious metals, silver for December delivery fell 23 cents to $21.15 an ounce, and December copper fell 3 cents to $3.59 a pound.

SOURCE – (AP)