Should you buy a Costco gold bar?
Costco’s gold bars have been selling out across the country. But are they actually a good investment?
Costco’s gold bars have been selling out across the country. But are they actually a good investment?
Costco’s gold bars have been selling out across the country. But are they actually a good investment?
Jean Folger is a freelance writer and editor with a knack for tackling complex subjects using simple language. She’s passionate about helping people make better financial choices so they have more money and time to spend on the things that matter most. In her 15+ years as a freelance writer and editor, she’s specialized in real estate, retirement, investing, and other personal finance topics. Jean has written extensively for SFGate, Business Insider, The Motley Fool, Opendoor, Prudential, Investopedia, and more. She co-founded PowerZone Trading, which has provided award-winning software, consulting, and strategy development services to active traders and investors since 2004. Jean graduated with a bachelor's degree from Ohio University. Previously, Jean was a licensed real estate broker, an English teacher, and an adventure travel trip leader. And, she’s also the proud parent of a Team USA Olympic athlete.
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Mega-retailer Costco is well known for its low prices and bulk buys, and some score discounts on groceries, apparel, appliances, electronics, auto supplies, housewares, hardware, sporting goods, jewelry, and more. The company recently made headlines by adding something unexpected to its inventory: gold ingots. The 1-ounce gold bars have proven wildly popular despite the nearly $2,000 price tag.
The gold bars are only available on Costco's website (not in stores), and you'll need to be a Costco member to make a purchase — or even view prices. Not surprisingly, the gold ingots are non-refundable, and there's a limit of two bars per membership.
Thinking about adding a gold ingot (or two) to your shopping cart? Here's what to consider before investing in a Costco gold bar.
Should you buy a Costco gold bar?
Costco sells two types of : a PAMP Suisse Lady Fortuna Veriscan bar and one from South Africa's Rand Refinery. The bars are made of 24-karat gold and come registered with certificates of authenticity.
According to Costco's website, the Veriscan bars are individually controlled, registered, and secured within protective CertiPAMP packaging. An official Assay Certificate is included, along with a digital certificate accessed with a QR Code. The Rand Refinery bars are individually stamped with a unique serial number and arrive in a sealed assay card.
The price of gold has been trending up over the past eight years, rising from $1,060 an ounce in 2015 to $1,978 as of Oct. 23, falling off a high of $2,080.72 in early May. While gold can be a solid long-term investment and a valuable portfolio diversifier, there are a few upsides and downsides to consider before buying gold bars from Costco.
Advantages of buying Costco gold bars
The gold bars come from reputable sources
Costco has a reputation for selling high-quality products. Its gold bars come from reputable mints, so buyers can be confident they're getting an authentic, quality product. Unlike gold coins, gold bars have serial numbers and certification, which can provide peace of mind to novice investors.
Accessibility
When the gold bars are in stock, they offer an easy way for beginners to invest in precious metals at a store where they're used to shopping. Air shipping via UPS insured is included in the price (a signature is required), and you'll receive the package in about two to three business days.
Disadvantages of buying Costco gold bars
Limited availability
Costco's goldbars have been flying off the shelves within a few hours of appearing on the website, so getting your hands on one may be tough. There's also a limit of two bars per member, so building a collection that could significantly grow your wealth would be tricky.
Limited guidance
Costco isn't an expert in handling or dealing with precious metals, and it doesn't offer advice or information to help you understand your options for investing in gold.
Mark-ups
Retail stores (including Costco) mark up the price of gold. According to multiple media outlets, the gold bars are selling for just under $2,000, a few percentage points higher than gold's spot price.
TIP: and gold prices have traditionally been negatively correlated. Interest rates tend to go down when gold prices go up, and vice versa.
Other ways to buy gold
Gold can be part of a well-diversified portfolio to help you weather periods of . If you're not a Costco member — or you're on the fence about buying gold bars from the same place you get your laundry detergent and dog food — here are some alternative ways to .
Gold bullion
Gold bullion refers to physical gold in the form of bars (like Costco's) and coins. You can buy gold bullion through online dealers like APMEX or JM Bullion, brick-and-mortar dealers, and some banks and brokerage firms.
Keep in mind that the cost of gold coins might be based on collector value instead of gold content, so they're best suited for knowledgeable collectors. And because physical gold can get lost or stolen, consider how you'll insure and safely store your investment.
Gold ETFs
Gold exchange-traded funds (ETFs) are an excellent alternative if you want exposure to gold without the hassle of buying, storing, and reselling bullion. Gold ETFs attempt to match the performance of gold, less the annual expense ratio. And because ETFs trade like stocks, you can buy and sell them at prevailing prices throughout regular trading sessions. Popular gold ETFs include SPDR Gold Shares (GLD), iShares Gold Trust Micro ETF (IAUM), iShares Gold Strategy ETF (IAUF), and VanEck Merk Gold Trust (OUNZ).
Gold stocks
Gold stocks are public companies that mine, process, finance, and trade gold. The share prices of gold stocks don't track day-to-day gold prices, but the companies' revenues are correlated with the price of gold. Examples of gold stocks include Franco Nevada (FNV), Agnico Eagle Mines (AEM), Gold Fields (GFI), and Royal Gold (RGLD).
Bottom line
Costco's gold bars offer the assurance of reputable sources and accessibility that will be especially attractive to novice gold investors. Still, Costco has been selling out of gold bars within hours of listing them on its website, leaving some would-be investors with error messages and empty shopping carts.
Fortunately, there are other options to consider, including established gold dealers (online and brick-and-mortar) for buying physical gold — and gold stocks and ETFs if you're looking for a more liquid investment.
Of course, gold investments of any kind aren't guaranteed to perform over the short or long term. Consider U.S. or if you prefer to put your money in a low-risk investment.
Editorial Disclosure: All articles are prepared by editorial staff and contributors. Opinions expressed therein are solely those of the editorial team and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in this article is accurate as of the date of the publish. Check the lender’s website for the most current information.
This article was originally published on and reviewed by Lauren Williamson, who serves as Financial and Home Services Editor for the Hearst E-Commerce team. Email her at .
