NEW YORK (AP) — Looking for something to put in your Costco shopping cart along with the 30 rolls of toilet paper? How about a gold bar?
Although it’s not a typical outlet for precious metals, the members-only warehouse chain’s 1-ounce gold bars sold out faster than its discounted 170-ounce jugs of detergent.
In a company earnings call last week, CFO Richard Galanti said that gold bars sold exclusively online disappeared “typically within a few hours” of appearing on Costco’s website – adding that there was a limit of two bars per member . They continued to sell out as of Wednesday.
Unlike the retail giant’s other discount finds, gold bars come with a hefty price tag. No prices were listed Wednesday because the bars were unavailable, but multiple media outlets reported last week that the 1-ounce gold pieces – offered in two designs – sold for just under $2,000 each.
That’s slightly higher than the current market price for gold, which was about $1,835 an ounce as of Wednesday afternoon.
Costco has not said how many gold bars it has sold recently or how often inventory is replenished. The Issaquah-based chain did not immediately respond to The Associated Press’ request for comment Wednesday.
Chances are, interest in Costco’s gold bars won’t be slowing down any time soon. Although an ounce or two of gold will not have a major impact on investment portfolio diversification, experts note that investor demand for precious metals has increased in recent years and is likely to continue to do so.
However, it is important to pause and evaluate the investment prospects. That’s what some experts say.
What is behind the demand for gold?
Experts say that interest in buying gold is often based on a feeling of uncertainty.
Jonathan Rose, CEO of precious metals broker Genesis Gold Group, says recent bank failures, inflation and individual concerns about the U.S. dollar, for example, may lead some to look for alternative places to park their money.
“If someone is buying gold, that means they think there is some kind of instability at the structural level of the market and/or the government itself,” added David Wagner III, head of markets and equities at Aptus Capital Advisors.
Is investing in gold worth it?
Rose and others say gold can diversify and balance your investment portfolio and reduce potential risks in the future.
“People are looking for a safe haven… to protect their assets. And gold meets all of those criteria,” Rose said. He added that people may see value in having something tangible – and put precious metals “in a safe deposit box or in a retirement plan, even like an IRA or 401(k)” … to protect what they have while they see what’s happening in the market.”
But not everyone agrees with this. Wagner says gold is “one of the worst things you can ever own.” The downsides, he argues, include that gold is not the inflation hedge that many say it is, with inflation having at times exceeded gold’s in recent decades, and that “there are more efficient ways to advance.” “To protect against capital losses”, such as through derivative investments.
The Commodity Futures Trade Commission has also warned people to be cautious when investing in gold. Precious metals can be very volatile, the commission said, and prices rise when demand increases – meaning: “When economic fear or instability is high, the people who typically benefit from precious metals are the sellers.”
If you decide to invest in gold, it is important to educate yourself about safe trading practices and be wary of possible scams and counterfeits in the market due to commission and other factors.
Gold for December delivery fell $6.70 to $1,834.80 an ounce by Wednesday’s close. In 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.