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Costco Enters the Precious Metals Market

Costco Gold: Should You Buy It?

It seems like everyone is getting into the gold business, including the wholesale retailer Costco. In late 2023, Costco began selling gold bars, rapidly selling out with each new shipment.
The company’s expansion into precious metals—including the recent addition of silver coins and bars—taps into the public’s growing demand for tangible assets. Wells Fargo estimates Costco’s gold sales are an astonishing $100 million to $200 million monthly.

People are flocking to buy Costco’s gold as a hedge against inflation, to protect against economic uncertainty, and to safeguard against the potential collapse in the dollar’s value. This surge in interest reflects broader market anxieties and the allure of gold as a stable investment in turbulent times. Overall, buying precious metals from Costco can be a great opportunity if you are able to acquire them. However, new investors should educate themselves about the precious metals market to make informed decisions about their investments.

Costco Gold: A Good Deal or Not?

Buying gold from Costco can be a good deal, but there are limitations.
Costco offers 1-ounce gold bars from PAMP Suisse and South Africa’s Rand refinery. They sell 1-ounce Canadian Maple Leaf silver coins in 25-count tubes. The gold bars are high-quality, but they often sell out due to strong demand and are not always the lowest on the market.

To make a purchase, you’ll need a Costco membership, which costs $60 or $120 per year. If you’re looking to stock up on gold, you’re out of luck. You can only buy up to five bars and Costco allows just one transaction per membership. As of this writing, Costco hasn’t indicated if the time frame restriction allowed for gold purchases is annual or lifetime.

Gold is not available at all Costco stores. Much of the time, you’ll need to order online. While shipping insurance is included, the buyer must be available to sign for delivery. UPS is the only shipping option offered, with delivery an estimated 3 to 5 business days from the time of order. Reviews of Costco’s gold shipping process are mixed, with some one-star reviews citing delivery problems such as damaged goods, packages dropped off without signature, and missing deliveries.

A few reviewers complained that state sales tax was mistakenly added to their purchase price even though they were in a state that didn’t tax precious metal purchases. While some U.S. states do not charge sales tax specifically on investment-grade pure gold bars and coins, there are a handful of exceptions where sales tax does apply. Before purchasing Costco gold online, you should check the specific rules for your state and municipality, as sales tax regulations can change over time.

Costco doesn’t offer trade or buyback options. This means buyers must navigate the secondary market to sell their investment since Costco is not your partner in the sellback process. Instead, you’ll need to work with a trustworthy precious metals dealer to trade your gold.

Despite these issues, Costco’s entry into the precious metals market is beneficial to the market as a whole. Their low-cost premiums make gold and silver more accessible, promoting them as viable investments. More Americans owning precious metals could strengthen the country’s financial security during economic turmoil.

As with any large purchase, it is important to price-check with competitors to ensure you are getting the best value.

What New Investors Need to Know About the Precious Metals Market

Investing in precious metals, like gold and silver, has its pros and cons.
Pros include being a hedge against inflation and economic downturns. Precious metals are tangible assets that hold value over time as private and secure assets. Gold and silver have held their value for centuries, serving as true wealth.

The cons involve price volatility, premiums (especially on numismatics), and the risk of scams in an unregulated market. You may also incur storage costs on precious metals held in third-party storage vaults.

It’s crucial for investors to understand spot prices, premiums, market trends, and the importance of buying from reputable sources. New investors should research thoroughly and stay informed to successfully navigate the precious metals market.

What Should New Buyers Look for When Partnering with a Firm to Buy Gold?

Before making a purchase as a gold investor, you’ll need to perform some due diligence. First, find a reputable dealer. Avoid firms with celebrity endorsements, as they often have high overheads, leading to higher premiums. Also, avoid trading in numismatic collectibles. While collectibles are an intriguing option, they are not considered a bullion investment and require expertise to avoid scams.

Always ask your dealer about shipping practices and insurance policies. Packages should be secure, discrete, and insured, with additional precautions to avoid unattended deliveries.

Look for dealers with high review rankings and over ten years of experience. Recommendations from friends or family can be invaluable. Ask if the salesperson is commission-based. If so, they might push investments that benefit them more than you.

Remember, buying gold and silver is about wealth protection and hedging against fiat money risks. Secure your investments by partnering with trustworthy, experienced dealers.

CMI Gold & Silver Makes It Easy to Buy and Sell Precious Metals

While Costco offers convenient gold buying, it lacks personalized guidance. At CMI Gold & Silver, our personalized service ensures new buyers make informed decisions, tailored to their investment goals and needs. CMI offers half a century of expertise and trust in the precious metals market.

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