If you can’t get your gold at Costco, consider an ETF that invests in gold. The Gagnam Times reports:
Costco, a well-known warehouse discount store in the U.S., is experiencing explosive popularity for a product that has been selling out for several consecutive days. This product is none other than the gold bars sold at Costco, which were launched in the U.S. last year and quickly sold out.
Costco is expected to generate ten times more revenue this year than last. Surprisingly, these gold bars are sold at 2% more than the market price. Despite the higher price, there’s a reason why they’re consistently sold out.
On the 9th (local time), CNBC reported that, according to Wells Fargo analysts, Costco’s gold bar sales are expected to reach $100 to $200 million per month. Last year, Costco made a trial sale of gold bars, and $100 million worth was sold out in no time. This year, they are significantly expanding this business, with a projected monthly revenue of $200 million.
Analyst Edward Kelly commented on this phenomenon, “Considering Costco’s aggressive pricing policy and the high level of trust from customers, we can expect a noticeable increase in sales volume.”
Currently, Costco is confirmed to be selling 1 ounce (28.3 g) 24-carat gold bars for around $2,400. Considering the price of gold bars traded in the spot market is $2,357 per ounce, customers are speculated to be at a loss immediately upon purchase.
Action Line: There are benefits and drawbacks to both investing in gold via ETFs and physical bars. Owning gold in an ETF gives you access to the precious metal’s performance as an investment without having to store it or keep track of it at home. And when you want to sell your ETF gold, you don’t need to worry about proving that it’s real or finding a buyer. But if you want to have your gold with you at home to use as a disaster currency, an ETF is not the best option. There’s nothing stopping you from buying gold both ways. When you want to talk about gold in your portfolio or at home, I’m here.
