In The Wall Street Journal, Debbie Carlson examines the value of the popular gold bars for sale from Cotsco. She writes:
While gold dealers might sell a variety of gold products—both coins and bullion bars—when Costco’s website opens gold sales often it is only in 1-ounce minted bullion bars, usually one of two types of bars from Swiss-based refiner MKS PAMP or one type from South Africa’s Rand Refinery. Costco also has sold gold in other amounts and recently offered silver coins.
What’s more, Costco doesn’t have spot gold prices on its website for easy price comparisons. Because gold prices are volatile, listed prices will vary, and Costco’s price may be above or below the day’s spot gold price. On Dec. 14, for instance, a 1-ounce PAMP 2024 Azure Dragon minted gold bar was available on Costco’s site for $2,079.99, about 2.5% over spot gold prices that day. It was gone in less than two hours.
Regardless, buyers say the cash-back rewards they get make it worth the buy. Costco members who upgrade to the retailer’s $120 executive membership earn 2% cash-back rewards to spend at the warehouse club, so buying a $2,000 1-ounce gold bar nets them $40. Others say they earn credit-card rewards, which lowers the cost as well.
Costco shoppers also get free shipping and don’t pay credit-card-processing fees. Online gold dealers charge for secure shipping and pass on the credit-card-processing fees to customers, which may add at least 3% to the final cost. On a coin costing $2,079.99, that is an extra $62.40. Dealers often have lower prices for customers paying by check or money wire.
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The challenges with physical gold buying are twofold: the seller’s reputation and the price.
“What are you buying and how do you know the purity? And there can be very large premiums on those bars or those coins,” says Will Rhind, CEO of GraniteShares, which issues gold ETFs.
But with Costco, he says, there is an element of trust that might encourage new buyers to jump in.
Read more here.
