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Should You Buy Gold at Costco?

Motley Fool - Sun Jan 28, 1:00PM CST

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Costco offers a fairly diverse product lineup. It has electronics, including TVs, laptops, and tablets. Kirkland clothing. The classic hot dog and soda combo for just $1.50. And all the way on the other end of the pricing spectrum, it has solid gold bars. They're popular, too, as it sold over $100 million worth in its last fiscal quarter.

They're only available on Costco.com, and you need to be a Costco member to buy them. Costco's generous return policy doesn't apply -- all gold sales are final. If you're thinking about buying gold at Costco, here's what you need to know first.

Costco is a reputable place to buy gold

If you're sure you want to buy physical gold, you can get a good deal on it at Costco. The gold bars sell out fast, because the prices are hard to beat. You also get the peace of mind that you're buying from a reputable vendor.

Many vendors charge a hefty gold premium. That's the markup between the price of a gold product and the current spot price of gold. It's not recommended to pay a markup of more than 5% to 8%, according to Michael White, spokesman for the U.S. Mint.

Like all gold products, Costco's gold bars fluctuate in price. But it consistently maintains a low gold premium. Previous prices have been around $2,000 for one ounce of gold with a markup of about 2.5%. Most people won't find a better price for gold than what Costco charges.

Decide if physical gold is right for you

You can buy gold at Costco at a reasonable price, but should you? There are a few common reasons that people decide to purchase gold:

  • As an investment
  • As a store of value
  • In case of a doomsday scenario

For investing, you're probably better off having your money in the stock market. From 1971 to 2022, U.S. stocks had an average annual return of 10.2%, according to Statista. Gold delivered an average of 7.8% over the same time period. You can make money by investing in gold, but over the long haul, investing in stocks will likely be better from a personal finance perspective.

Also, keep in mind that it takes time to buy and sell physical gold, and you'll lose money to fees on both ends of the transaction. It's much easier to buy and sell stocks, and all the most popular online stock brokers don't charge commissions.

That doesn't mean gold has no place in your portfolio. There's nothing wrong with having a mix of assets. But you don't need to buy physical gold. There are exchange-traded funds (ETFs) that invest in gold for you. This is much more convenient than physical gold, since you need a safe place to store that.

As far as the other reasons to buy gold, it works well as a store of value. And it might come in handy during a societal collapse -- although I'd probably start prepping with some canned food before spending thousands on gold.

How to buy gold at Costco

Here's how to buy gold at Costco:

  1. Go to Costco.com and log in to your account. If you don't have one, you'll need to buy either a Gold Star or Executive membership.
  2. Search for gold bars. Costco offers several different one-ounce gold bar options.
  3. Add up to two (the limit) to your cart and go through the checkout process.

Costco sells out and restocks these often. So if you don't have any luck the first time around, try again later.

If you have an Executive membership, you won't earn the 2% reward on your gold purchase. Unfortunately, gold bars aren't eligible. You can, however, pay with a rewards credit card and earn cash back or points that way.

One last thing to remember is that your signature is required upon delivery. Costco definitely isn't letting delivery drivers leave these on your porch. Keep an eye on the tracking information, and make sure you're home on the scheduled delivery date.

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We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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