In the past year, there has been a surge in the gold investment craze, with gold prices significantly higher than a year ago. Inflation continues to erode the purchasing power of Americans, prompting more people to view gold as a safe-haven asset. After all, gold can effectively hedge against inflation and become a reliable tool for diversifying investment portfolios.
While options for purchasing gold have been limited in the past, it is now possible to buy gold bars at major retail chains like Costco and Walmart or through gold investment companies. When buying gold, it is essential to weigh key factors to determine the most suitable method. CBS News has discussed the potential pros and cons of each option with investment and gold experts.
Just like shopping in physical stores or online, you can purchase gold bars and coins at Costco, offering the convenience of choosing specific stores for purchases or buying online through the Costco website.
The culture of online shopping today has made shopping more convenient than ever before, with most retailers allowing returns or refunds. However, purchasing gold at Costco is considered a “final transaction,” as opposed to the usual return policies.
In recent years, the price of gold per ounce has seen a significant increase, even reaching historic highs at one point. Considering the already high costs, gold investors need to be mindful of the markups when buying physical gold. The markup at Costco for gold is often lower compared to other options, making it an attractive choice.
Steven Conners, founder of Conners Wealth Management, stated, “Markups from many independent dealers range from 2% to 30%, while Costco’s markup is only 2%.”
While Costco offers high convenience, the choices for buying gold are limited, and there are restrictions on the quantity of gold one can purchase from Costco.
Costco may not provide the desired variety in gold purchases. While it may be a good starting point for buying gold bars, those looking to invest in gold exchange-traded funds (ETFs), gold stocks, or gold individual retirement accounts (IRAs) without the hassle of storing physical gold may need to look elsewhere.
Unfortunately, the gold investment sector may have some bad actors, warranting thorough due diligence in selecting a reputable company, which can be a significant advantage for well-known brands like Costco.
Purchasing gold at Costco is easy, but when it comes to liquidating investments, the retailer does not buy back gold bars and coins.
William A. Stack, a financial advisor at Stack Financial Services LLC, noted, “If you purchased precious metals at Costco and wish to sell, you will need to contact other precious metal dealers. These dealers often offer better buyback prices than the product’s initial purchase value, and sometimes they will not repurchase gold from other sellers.”
A significant benefit of working with gold investment companies is having more options. Whether buying physical gold from precious metal dealers or investing in gold-backed securities through investment companies, there are multiple choices available.
When purchasing gold, one typically needs to pay the spot price and the seller’s markup. Through gold investment companies, markups can be much higher than Costco’s 2% markup.
Gold investors should carefully research strategies before purchasing gold. While gold investment companies may offer methods to assist in devising strategies, this service is not provided by Costco.
When working with precious metal dealers, it is possible to track the gold-to-silver ratio and exchange gold for silver or vice versa at the right time. This service is not available at Costco.
There may be concerns about purchasing fake or low-quality gold when working with gold investment companies. Collaborating with a disreputable company or seller may result in buying lesser-quality products.
Gold investment companies are easily accessible, whether online or offline, enabling the general public to buy their offered products with ease.
For novice gold investors, there is the risk of being convinced to purchase unsuitable items and paying the price for it.