Two years ago, some shoppers raised eyebrows when Costco (NASDAQ:COST) began selling gold bars online. But anyone who bought one then, or even a year ago, is now sitting on a serious gain.
Gold's Big Jump Reflects Economic Uncertainty
A one-ounce gold bar at Costco on Sept. 6, 2024, sold for around $2,496. A year later, that same bar of gold is worth roughly $3,586—a jump of 44%.
The rally in gold prices is being driven by a mix of inflation concerns, geopolitical instability, and growing expectations that the Federal Reserve will cut interest rates soon. “With two wars ongoing, trade tensions, U.S. debt concerns and fears over [Federal Reserve] independence, gold’s traditional ‘fear hedge’ role remains strong,” Jon Ulin, a Florida-based financial planner, told CNBC recently.
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Peter Schiff, a gold proponent with SchiffGold, said on X recently, “Gold is up $180 over the past five trading sessions, and silver is up over $2.50. Fed officials are blind to this clear vote of no confidence in their policy pivot.”
Investors often turn to gold when they're uneasy about the economy. Weak job market data and political pressure on the Fed's leadership have added fuel to the fire.
Costco Bar Buyers See Big Gains, But There's A Catch
If you bought a gold bar from Costco last September, you likely paid between $2,495 and $2,679. With gold now at $3,586, your bar has increased in value by 32% to 44%, depending on the original purchase price. However, that doesn’t mean you’ll pocket the full difference if you sell.
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“Most buyers will likely melt the bar down for resale, so whether it’s still in its original Costco packaging with the certificate doesn’t make a huge difference,” Ulin said.
Ulin also warned against selling through platforms like eBay or Facebook Marketplace due to scams and lowball offers.
As demand rises, some analysts predict gold could climb even higher. Goldman Sachs (NYSE:GS) recently suggested prices might break above $4,000 if investors shift even a small portion of assets away from bonds. Gold remains their highest-conviction long recommendation.
Whether you hold or sell, the Costco gold bar turned out to be a pretty solid investment.
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