Gold and silver bars have emerged as hot commodities at Costco this year, with the retail giant reportedly raking in approximately $200 million per month from sales. Each fresh batch of gold bars flies off the shelves within hours, fetching a small mark-up over the spot price.
According to The Wall Street Journal, some buyers have ventured into the realm of commodity trading in a bid to capitalize on their gold investments. However, gold expert Taylor Huff, CEO of My Gold Advisor, cautions against adopting this approach indiscriminately.
Here are three essential tips from Huff for prospective gold buyers:
1: Gold is a Store of Value, Not a Quick Profit Venture
“Buying physical gold isn’t about turning a quick profit; it’s about safeguarding and preserving your wealth,” advises Huff. “By investing in physical gold, you’re diversifying your assets beyond the conventional banking system.”
Historically, gold appreciates at an average rate of around 8% per year, serving as a popular hedge against inflation. Consequently, buyers should be prepared to hold onto their physical gold investments for at least a year, if not longer, to reap the benefits. Additionally, the potential 8% increase can help offset any discounts or fees incurred when selling the gold, as dealers may not always pay spot prices.
2: Research Reputable Dealers in Advance
While awaiting gold appreciation, Huff recommends researching and establishing connections with reputable dealers who would offer fair prices when selling the bars. This proactive approach proves invaluable should unforeseen circumstances necessitate an early sale of the gold stash.
Furthermore, Huff suggests considering silver as a complementary asset to gold, particularly for a straightforward investment strategy. Monitoring the gold-to-silver ratio can aid in determining opportune moments to adjust one’s portfolio.
3: Prioritize Security
Despite its high value, gold is remarkably compact, with significant sums easily fitting into a small space. For smaller stashes, Huff recommends investing in a fireproof safe, preferably bolted to the floor, or utilizing a fully insured self-storage unit.
For larger holdings, private depositories specializing in precious metals and collectibles offer secure storage options, complete with insurance coverage. Huff emphasizes adopting a mindset of preserving wealth and treating gold as a long-term asset, with the focus on safeguarding rather than liquidating savings.
In Essence
While Costco may offer convenient access to gold bars, shoppers should approach their purchases with careful consideration, focusing on long-term wealth preservation rather than short-term gains.
