Costco gold bars are selling out within hours

https://www.cnbc.com/2023/09/27/costco-is-selling-gold-bars-and-they-are-selling-out-within-a-few-hours.html

by walterbell • 3 years ago

195 489 3 years ago

Purchase limit 2 per customer.

Spot price appears to be manipulated for quite a while. Lots of demand for precious metals, yet the price isn't really going up, especially with inflation.

callalex• 3 years ago

“Lots of Demand”

[citation needed]

quickthrower2• 3 years ago

Gold as a store of value works better when the world is using it as a reserve, but they don’t anymore so it is just like any other limited supply commodity and doesn’t necessarily need to go up in price due to inflation. It only will go up due to emotion.

injeolmi_love• 3 years ago

In 2022 alone, central banks purchased 1,136 tons of gold[1]. The us government holds over $500b in gold[2]. Gold is still valuable as a reserve asset because it’s highly liquid, demanded by every economy, and has low inflation. Central banks frequently do settle balances between each other by transferring gold (often just involve moving the gold from one part of a warehouse in London to another part). Gold hasn’t gone away, and it’s not fading out either.

[1] https://www.reuters.com/markets/commodities/central-banks-bo... [2] https://www.fiscal.treasury.gov/reports-statements/gold-repo...

ralusek• 3 years ago

Yes, it's incredibly odd. Most US large ETFs and crypto have basically been in lockstep for much of the last few years. Same with housing, delayed a bit. It seems to indicate that that we're seeing when we look at the price of these assets is largely just a map of inflation rather than a substantial increase in value (i.e. just a graph of non-USD assets going up in terms of USD as real value of USD decreases). The easiest thing to check against, though, is gold, which has barely budged in comparison. Metals are not moving in lockstep. Given inflation, and the uncertainty at the beginning of COVID, you would've really expected something there. Genuinely don't get it.

sfjailbird• 3 years ago

There are whisperings in the investment community that the market is manipulated. Almost all gold trading is ETFs, and their gold holdings are managed by a chain of custodians several layers deep, none of which conduct public audits. The terms of the ETFs make it clear that they are completely absolved from any risks and responsibility for the holdings. At the same time, the practice of leasing out the gold in the vaults is well documented, so it is impossible to know who (or how many) 'own' a given gold bar at any given time.

The industry could counter these misgivings, by making the holdings publicly auditable, but chooses not to.

pakitan• 3 years ago

S&P is up 4 times since its low in 2002. Gold is up 6 times since 2000. And you call that "barely budged"?

csomar• 3 years ago

Prices went up a lot following 2020 (way above the inflation numbers). I think they are finding a new spot around the inflation numbers (maybe a bit higher but not too much).

gniv• 3 years ago

Why assume manipulated? Could be just lots of supply.

The supply of new gold at least is pretty high: https://twitter.com/LynAldenContact/status/17066072297915888...

defrost14• 3 years ago

Pfft, why settle for a 1oz bar when you can get a

Mother and Baby Kangaroo 2023 2oz Gold Bullion Coin

https://www.perthmint.com/shop/bullion/bullion-coins/mother-...

from the Perth Mint?

( Or Dillon Gage, Texas: https://dillongage.com/coins/perth-kangaroo/ )

Buy one for your mother and two for your girlfriend, they're so cute you'll want more!

Don't turn over if you're not into monarchies

Caveats when biting the gold: https://www.perthmint.com/news/media-announcements/corporate...

xcdzvyn• 3 years ago

I like that Perth Mint considers "Australian legal tender" a feature of a $6,000 coin

Symbiote2• 3 years ago

The British mint explains that this makes their bullion coins exempt from capital gains tax: https://www.royalmint.com/invest/bullion/uk-coin-ranges/sove...

There are probably similar rules in other countries.

defrost14• 3 years ago

It's a 'feature' 49 coins @ $200 each is less than $10,000 in legal tender and doesn't have to be declared as a cash transaction or carry on cash.

Also handy for reducing transfer taxes on house purchases - you can have a higly qualified QC (fancy lawyer) swear affidavits that they witnessed the purchase of a house for an absurdly low amount and therefore the required tax is correct despite being so low.

supermatt2• 3 years ago

I love the idea of coins, but I wish they didnt have a value written on them - 200 AUD in that case - about 30x less than its material value.

I can just imagine someone inheriting my coins and spending them for face value!

albert_e• 3 years ago

I can just imagine someone inheriting my coins and spending them for face value!

self-deprecating joke about your genes :)

dkjaudyeqooe3• 3 years ago

Surprised you didn't go with the 5oz 'Super Pit' at $9,500 USD.

https://www.perthmint.com/shop/bullion/bullion-coins/super-p...

The regent on the obverse is a standard feature of all Australian coins.

fy20• 3 years ago

As it is a 2023 coin, why doesn't it have Charlie?

ggm2• 3 years ago

I'd love to see an economists take on the value to a consumer of holding gold in this form, at the price.

Investment gold is usually kept in vault, and you trade ownership arms length. Direct gold ownership is rife with risks: fineness, substitutions and overpriced purchase. Yes, you can always sell at a mall gold trader but that's way way off market price.

So it's an inflation hedge with a lot of cost and risk and demands huge upswing in gold price to pay off. And securing it at volume is a nightmare. Plus Costco wants to limit you to 2, and have a margin.

12907835202• 3 years ago

Sounds like people who buy currency from a high street currency exchange or bitcoin from coinbase (or a high street bitcoin ATM!) Even if the theory of investing may be sound they haven't really thought through how they're going to sell it later. No doubt they have heard investing in the particular thing is a good idea but lack the knowledge to properly apply it.

baron8162• 3 years ago

I’m not sure an economist (a mainstream economist) would really care that much about an individual holding gold. Maybe there’s an interesting behavioral question about why people become so paranoid about the value of the dollar when it’s proven to be so incredibly stable (yes, even with the recent spike in inflation—it’s nothing close to hyperinflation). But people going to Costco and buying gold doesn’t have an effect on the wider economy. Costco’s business isn’t even really affected. Gold is not money. It’s never going to be money again. So why care?

mschuster91• 3 years ago

Maybe there’s an interesting behavioral question about why people become so paranoid about the value of the dollar when it’s proven to be so incredibly stable

Because we live in very uncertain times: a land-grab war in continental Europe, a serious and credible threat of both the US and a lot of European countries to fall to fascism, the threat of the US government going into an unprecedented shutdown yet again, and if that were not enough, it's reasonable to assume there will be an actual hot war with China in a few years' time.

Historically, people have always fled towards gold in uncertain times.

Hendrikto3• 3 years ago

why people become so paranoid about the value of the dollar when it’s proven to be so incredibly stable

Every fiat currency that ever existed collapsed at some point.

Gold is not money. It’s never going to be money again. So why care?

Gold survived all of them. It’s still being used as a financial instrument, after thousands of years, countless wars, changes of government, complete societal collapse and reorganization…

Gold is definitely a safer long-term bet.

bondarchuk• 3 years ago

I’m not sure an economist (a mainstream economist) would really care that much about an individual holding gold.

Roosevelt seemed to care quite a bit: https://en.wikipedia.org/wiki/Executive_Order_6102

Apparently this lasted until 1974 (not sure about the details though, I always hear about the executive order in 1933 but never about the impossibility of owning gold between 1933 and 1974 - but that's what the articles seem to say) so a lot of mainstream economists have at least implicitly agreed.

https://www.nytimes.com/1974/08/15/archives/bill-signed-to-a...

bhaney• 3 years ago

I just think it's neat to have

iancmceachern• 3 years ago

I've been thinking about this.

People invest/collect gold like this and it clearly only profitable for the people who buy and sell gold who charge you to do both.

I also think it's a hobby. Like people collect this or coins or stamps or Pokémon cards. I think as far as things to spend your time on for entertainment, you loose the lease amount on this compared to collecting other things or spending the time you spend on this entertainment doing another form of entertainment.

It's not investment unless your scrooge mcduck and have a big gold factory, it's really entertainment like collecting baseball cards.

Ekaros• 3 years ago

Physical gold might have value in situation where financial institutions and markets start to lose any trust in themselves. Either by manipulation, government confiscation or fraud.

But, things will be pretty bad at that point from every viewpoint. As essentially global markets are crashing. On other hand, in even bigger crisis gold won't be that valuable at least for a while. If food and fuel are first priority people are unlikely to trade them for shiny metal...

badrabbit3• 3 years ago

Shiny metal is better for trade than bartering because it is rare and easy to break down into smaller chunks. Its value is that people other than the persons trading with it are also willing to trade with it. Guns and ammo sound like a better alternative but their rarity is unknown and unpredictable and even less people might be willing to trade with them on a regular basis unless it's a literal warzone. Food perishes and it's rarity is also an unpredictable.

e63f67dd-065b3• 3 years ago

I don't understand why people keep thinking that a financial meltdown means societal meltdown. There's plenty of places where the economy is or has already melted down even right now -- Sri Lanka, Argentina, Venezuela, etc. We can observe what happens when political institutions completely and utterly collapse, because it's happened multiple times already. What happens is not immediate apocalypse where people riot and society breaks down; it's mass protests, shows of solidarity, people help each other out, etc. The prepper scenario of "I've gotta defend myself against mobs out to raid for food" really doesn't happen.

If we stretch it back a few decades we see things like the Wiemar republic, complete anarchy during the Russian civil wars when blacks, whites, reds, etc all marched across the countryside, Chinese civil war, or even just recently we have Yemen, ISIS, Ethiopia, and in none of these cases have a zombie apocalypse-style "have to defend myself with my gun and ammo" societal breakdown occured and people bartered with gold. It turns out that people organise very quickly, and a every-man-for-himself-style situation like in stories just doesn't happen.

Maybe a civil war breaks out, maybe there are food shortages, but for the most part if violence breaks out, it's organised, mainly in the form of civil wars or local power struggles. One guy with a gun is not gonna help. Food protests are common, but rarely end violently. People keep thinking that "this time is different", and they're wrong every time.

satellite22• 3 years ago

You don't need to lose trust in the system as a hole. Only in the fact that the system serves you.

Bank accounts gets frozen all the time and for a variety of reasons.

msla• 3 years ago

If things have collapsed far enough where physical gold is the only currency, physical gangs will be out there confiscating said gold from physical corpses not in said gangs. The word for a catastrophe where middle-class people survive without being press-ganged into a military or otherwise being placed under the thumb of a strongman is "contrived" or, perhaps, "fictional". If you want a collapse, look at what happened in Russia in 1917, or Cambodia in 1970.

eloisant2• 3 years ago

Yes, I don't understand why people think that gold has some sort of intrinsic value.

It only has value because we collectively agree it's valuable. But in itself it's not super useful, yes there are some industrial applications where it's better than other metals but if it was only valued on this basis it would be worth much, much less.

dr_dshiv• 3 years ago

It’s a prepper thing, isn’t it?

jansan• 3 years ago

Before 2008 quite a few people around me were purchasing physical gold. I even know of one guy who bought 20000€ worth of gold. AFAIK none of them had any idea afterwards what to with that stuff. I assume it is rotting (or keeps on shining) in their basements and will only be touched when they die or move out.

oefrha• 3 years ago

I bought a gold bar worth a couple grand just yesterday. It hardly takes up any space in my nightstand drawer. There’s no need to come up with an idea of what to do with it, it’s not like 20k worth of gold is a huge brick or something.

ifdefdebug• 3 years ago

Just looked it up, if that one guy needs money today his 2008 €20k gold would buy him >€40k today. Not so bad.

Ferret74462• 3 years ago

One of the nice things about gold (one reason it is so valuable) is that it doesn't "rot" or degrade, like, at all. Naturally, it does not tarnish.

So unless you have a lot of aqua regia lying about in your house, it will remain exactly as is.

e63f67dd-065b3• 3 years ago

You can see it happening right now in Argentina: the local currency is worthless, and people are flocking to ... US Dollars. Not gold, not bitcoins, but good old benjamins.

So gold isn't even a good inflation hedge: if you walked the streets of a failing economy (pick one: Argentina, Venezuela, Sri Lanka, there's plenty more) and tried to exchange gold for goods, you're not gonna get far (and will probably get mugged). You have to figure out how to convert that gold into something somebody will actually take, and that seems like the hard part.

ArtTimeInvestor2• 3 years ago

Why do you think that people in Argentina are flocking to Dollar and not to Bitcoin or Gold?

When I look at the search trends in Argentina, I see Bitcoin in a very volatile longterm uptrend, Gold in a longterm downtrend and the Dollar being constantly a distant third:

https://trends.google.de/trends/explore?date=all&geo=AR&q=go...

Over the 20 years which the Peso has been devaluing, Bitcoin has outpaced the others by far in terms of searches.

What other indicators could we look at to get a better picture?

olalonde8• 3 years ago

What are you basing that claim on? Do you have evidence that Argentinians are not buying gold nor Bitcoin? I don't know about Argentina, but Turkey also has a massive inflation problem and Bitcoin is huge over there. They probably have the highest rate of Bitcoin ownership per capita in the world (or it has to be close).

noduerme8• 3 years ago

Not exactly. I just sent this link to my (Argentine) friends with a different observation. My observation was: The United States is starting to look like Argentina.

You must understand: Most Americans are not accustomed to shoving a third party currency under their mattress, or buying physical gold. The phenomenon of hyperinflation is foreign to them, and there's a steep learning curve.

The actual significance of this is that metal is being offered at a "blue dollar" rate by one of the three largest retailers in America. Prior to there being any concept of blue dollars here. This is going to influence spot prices. The people buying this are too stupid to even go to their local coin dealer. (Which I do, sometimes, go to my local coin dealer - and trust me - the people there to buy are generally pretty stupid).

If I had an hour, I'd like to expound on the significance of Americans buying precious metal at a loss through a giant vertical monopoly. But I'll leave it at the fact that they seem to be starting to alert themselves to the one critical thing that has defined Argentinian inflation for the past 20 years: Bullshit figures from the government saying the currency is stabilized, at the same time as the government takes obvious punitive measures to curb inflation. This leads to distrust which leads to the demolition of the currency.

Argentines can take a 20% drop in the Peso with a morning medialuna. Americans have no fucking idea what's going on. Americans have barely begun to put together the networks to measure it - and is evidenced by Costco taking advantage here, Americans have absolutely no peer-to-peer ways of negotiating the value of a dollar against value anymore. That's quite a dangerous situation, because it means prices are psychologically still thought of as an "act of God" as opposed to any true understanding of who is outpacing whom.

Like I said, inflation and hyperinflation especially are a steep learning curve.

If I were living in BsAs, I'd begin looking for something else to put under the floorboards besides USD. And voting for that clown who wants to tie ARS to USD as if it was 1983 is probably like trying to get tickets to the Titanic right before it sinks. You can do better than resurrecting Menem's economy. (Then again, the Fernandez are even bigger clowns, which is why I refuse to engage in anyone's politics in Argentina).

once_inc• 3 years ago

To my knowledge, Crypto is pretty big in Argentina, with Bitcoin, Tron, and tether the biggest players.

rightbyte• 3 years ago

You have to figure out how to convert that gold into something somebody will actually take

You need coins. You can't walk around with a gold bar. I would say silver coins to keep the value down, too.

As a "my government made our money useless" back up. USD cash are good too unless you are American, obviously.

altacc• 3 years ago

I notice this when travelling the world and it's one of the main reasons I think the many of the arguments for cryptocurrency are flawed. I've used decades old dollar bills in SE Asia that have been pretty much detached from the US economy for decades and have held value better than bitcoin ever has. The value of the dollar is linked not just to the US economy but also a global black economy and that has some unoffical influence on exchange rates & dollar value.

kylebenzle3• 3 years ago

It's unclear to me why so many people seem to think it is difficult to sell precious metals? I can sell my silver gold down the street for 95% of spot any day, or if I want to wait for a check in the mail I can send it overnight to Max and get 99% spot.

Within 48 hours I can easily convert my precious metal to bitcoin, cash or get a check. People's general fear of holding and using gold seems to be very similar to the unfounded concerns with Bitcoin. I think people just don't trust themselves with money.

LeFantome• 3 years ago

You do it trade 1 oz gold bars for goods. You are not trying to buy sugar with them.

They are for paying off the border guard when a family member does not have the right docs or the low level soldier checking lottery numbers to see if you can get on the escape vehicle or enter the bunker.

These are real “world is going to fall apart” hedges. I am not expecting a crisis of that level in my neighbourhood but they have certainly happened before ( crossing borders in WWII took a few diamond earrings perhaps ) and there are risks now that are bigger than ever.

Puts• 3 years ago

As an inflation hedge, maybe you don't even care if you loose money on your gold. As long as you don't loose as much money you would have on inflation. Sometimes it's just good to have anything left rather than nothing.

wodenokoto• 3 years ago

I have some friends who are into owning gold. Their rule of thumb is:

You can own gold mines on paper, but gold, only in hand.

There is a belief that there exists a lot more paper gold than actual gold. So when the run on the reserves starts, the price of gold will explode as billions of dollars worth of gold in the market disappears.

Although I’m not sure if Costco buyers are thinking like that.

sambazi4• 3 years ago

There is a belief that there exists a lot more paper gold than actual gold. So when the run on the reserves starts, the price of gold will explode as billions of dollars worth of gold in the market disappears.

very good sales pitch!

cf141q532510• 3 years ago

Its not just a belief. The ratio is something in the region of 100x. Its also not just a precious metal thing, most markets function that way due to long and short positions. The paper market is always quite a lot larger then the actual one.

tim3334• 3 years ago

You can buy things like GLD https://www.spdrgoldshares.com/

an ETF backed by physical gold. Probably safer and cheaper than getting bars from Costco.

philwelch2• 3 years ago

When I looked into this, the consensus seemed to be that the best form of gold, if you want to physically hold it yourself, is gold coins minted by reputable national mints. American Gold Eagles, South Africa Krugerrands, etc. These trade at close to spot.

And a 1 oz Krugerrand or Gold Eagle is about $20,000. If you can afford enough volume of those that it’s difficult to secure them, you can afford to secure them.

ggm2• 3 years ago

Funny story: when we bought our second house we found the previous owners had left high in a cupboard a small trumpet case containing a trumpet, a set of freemasons regalia and about 20 krugerrands.

We took it round to the old owners new house and passed it all over. They seemed happy. I think I'd have struggled to keep it the law not withstanding.

Three months later we found a box of (from what I am told, illegal, modified) small arms bullets hidden behind the wardrobe. We handed that into the police.

AdamN5• 3 years ago

Sort of. You want minted bullion. Usually they're capital gains free too. Nonetheless I don't think gold is a great investment for preppers or for just normal investing. There are also some very serious environmental/human rights concerns with gold that keep me out.

netcruiser• 3 years ago

It's $2,000, not $20,0000 (I assume USD). Gold coins are pretty easy to come by in my experience.

qp11• 3 years ago

In most of the under developed world were financial systems are unstable/dont control the economy, they dont convert gold into local currency. They use it as currency. "You want that cow, give me that nose ring".

Ofcourse in the "developed world" the problem is, one fuckhead will show up, who wants to own all the cows, for no logically reason other than he just has too. Naturally gold wont work.

rwmj• 3 years ago

Only in your fantasy world. In the real world they trade dollars.

pjc507• 3 years ago

Quite a lot of the "less developed" world has person to person mobile payment systems such as M-Pesa.

mrweasel• 3 years ago

It's not actually that stable of an investment vehicle, sure price have generally been going up over the past ten years, but if you bought gold in around 2012, you would have lost money if you where not able to hold on to it for another eight to ten years.

Personally I think the prices might be to high and a drop is coming. To keep the market moving someone is now trying to create a new market segment and is attempting to pull in new customers, apparently via Costco. This is either to prevent a slump in sales or to offload gold holdings before the price starts dropping.

anonzzzies• 3 years ago

The only reason for keeping it personally would be barter in case of a total economic collapse. I mean; my precious metal ETF, nuclear energy ETF and accidental USD currency purchase at the right time kept me fully clear of any inflation here in the EU, but I doubt physical gold would do anything like it. However for barter….

leni536• 3 years ago

That still assumes that gold would hold its value in a total economic collapse. Why would it?

victorbjorklund• 3 years ago

If everything breaks down (like not just a blackout etc but all of society disapears) you are probably better off bartering with useful stuff like guns, food, tools etc

bjackman• 3 years ago

As well as collapse I think there's a case to be made for hedging against loss of access to the normal financial system.

E.g. maybe one day the CIA will believe very strongly that you are a terrorist. In that situation a kilo of gold might be extremely useful!

Actually this is probably an even stronger case - gold will lose almost as much value as money in the case of economic collapse. Whereas wanted terrorists can probably still get a fairly decent price.

AdamN5• 3 years ago

I always bring up Somalia. The government crumbled and they continued to use local paper currency even after the printing presses were destroyed and there was nothing backing it. In the actual global collapse scenario, physical cash is likely to be more fungible and still have value than gold.

So if you really want to prepare for that (which should be like step 156 in terms of prepping), the right solution after you have all your direct physical needs (canned food, medicine, etc.) is simply a cash stockpile.

dageshi• 3 years ago

I think the true use of physical gold is as a means of carrying wealth from a collapsing financial system to a new one.

That is, it's not a hedge against inflation, it's a hedge against financial system instability/collapse of which severe inflation can be a harbinger.

Beijinger2• 3 years ago

"Direct gold ownership is rife with risks"

Every kind of ownership comes with "risks". It is stupidity not to own gold "directly". Buying a gold ETF is likely a bad idea like having your cryptocurrencies not under personal control.

Precious metals ETF charge a yearly fee. A buddy of mine once developed a financial instrument, where the ETF really owns the metal and does not mimic its spot price but also pays a dividend. (And yes, it was legit and a great idea)

daymanstep• 3 years ago

Where does the money come from for the dividend? If company profit or gold price goes down does the dividend become negative?

OJFord• 3 years ago

Since GP won't say, my guess is the idea was to explicitly not target capital growth, but a fixed value ('does not mimic spot price') - so you buy in at spot or with some some spread, and the dividend pays out by selling the underlying as spot goes up, with some buffer for fees and being able to buy a certain amount as it falls.

If the dividend were also a function of volume & prices of (filled) ETF orders, it could tolerate up to 100% loss.

But that doesn't account for the 'I said precious metals, not gold' hint.

reaperman• 3 years ago

Costco really doesn’t have any appreciable margin on their products. Their net profit[0] is only a tiny bit more than their membership fees - effectively they sell their merchandise “at cost” (including overhead).

0: https://www.reddit.com/r/Costco/comments/16tae6a/how_does_co...

JumpCrisscross2• 3 years ago

I'd love to see an economists take on the value to a consumer of holding gold in this form, at the price

Directly-held gold is mostly a scam. In good times, vault gold trades at a premium. (Like diamonds, try to sell your ingot of gold for anywhere close to commodity spot.) In bad times, someone will stab you for it.

Unless you have $100+ million, where you can charter your own logistics outside government-sanction lines to e.g. aerolift you [1], your family and your gold across national borders, directly-held gold isn’t doing anything for you.

There are vanishingly few cases where your vault-held gold certificates are valueless while your directly-held gold has value.

[1] Also, news flash, when dictators flee they carry dollars. Gold is heavy and traceable if you’re using proper bars.

0cf8612b2e1e2• 3 years ago

If you do not want gold to be traced, surely it is worth taking a hit in value and melting down the stamped ids?

bsder• 3 years ago

I'm really left scratching my head about people who buy gold to hold physically and personally rather than as an investment.

In any situation where it might be relevant, how are you going to sell your gold?

For example, if you bought one of those bars right now, how would you then sell that bar again right now?

And, if things really are completely collapsing, nobody wants gold. They'll want something much more immediately useful--food, clothing, ammunition, etc.

I did look at this to see if it was cheaper than any jewelrymaking gold I could buy, but the prices are bang on identical per ounce.

refurb7• 3 years ago

Right now it’s not hard to sell. There are reputable gold traders who will pay cash, usually at market prices (minus some margin).

But presumably if the shit hits the fan and the USD is worthless, it’s a form of trade.

I don’t disagree not a great one. My biggest issue is if you want to buy food what do you do with a $2,000 piece of gold? Buy $2000 in food? You can’t really divide it up (a random chunk of gold is much less valuable than a minted coin).

hcks2• 3 years ago

I’d guess threat model is less “there is a zombie apocalypse” and more “you need to flee to another country”.

md_• 3 years ago

And, if things really are completely collapsing, nobody wants gold. They'll want something much more immediately useful--food, clothing, ammunition, etc.

I'm not sure I buy that. Barter for an intermediary is fundamentally useful. In a case of societal collapse, people with food/clothing/ammunition--or people who can provide useful services (like driving me to the nearest border) aren't going to want more food/clothing/ammunition--they're going to want something fungible that they can trade for what they need!

So, sure, there's probably some rare scenario where gold (ideally in small, easily verifiable discrete units, not big bars) is useful.

cf141q532510• 3 years ago

I'd love to see an economists take on the value to a consumer of holding gold in this form, at the price.

I doubt you will find any unbiased opinion. Its important to remember that economists arent solely focused on the IS state. Its not a science, its perception management. The narrative is self fulfilling.

I really enjoy the npr article on the Brazilian inflation on this https://www.npr.org/sections/money/2010/10/04/130329523/how-...

The tldr is that the economy is what you think it to be.

brutus12133• 3 years ago

Totally correct. Was watching an interesting town hall by the Fed for educators, and it was interesting to hear JP say "we have so many fine [Econ] textbooks", and in a different sentence say "it takes a few editions to catch up to our innovations". It was perfectly illustrating what I learned in undergrad Econ .. it is the science of explaining what happened. Extrapolation is fine but under no warranty. I have made major personal blunders relying on established econ theory to hold (especially around housing). My new take is the govt will bail out the masses in some instances, so just follow the trend.

attentive• 3 years ago

Easy buying is great, but it's only useful if there is also an easy and lossless selling. And there isn't.

Spooky23• 3 years ago

Gold is a scam. It’s an awful inflation hedge.

Success in the market as far as selling it to retail is more a demonstration at how successful certain elements in society have been peddling fear.

demondemidi• 3 years ago

Totally. It is 100x oversold on paper. There’s a short squeeze coming. It has nothing to due with the intrinsic value of gold and everything to do with four decades of hype convincing American rubes to buy it.

tim3334• 3 years ago

Dunno. For a scam it's been held by an awful lot of central banks, for many decades, who you might think would figure these things out.

Re inflation it has historically been good at being fairly constant in value in real terms which is not usually what you actually want in an investment - you want them to go up.

Here's the famous graph from Stocks for the Long Run with the 200 year track record https://occaminvesting.co.uk/wp-content/uploads/2021/01/Stoc...

That shows stocks as the best, though for a reasonably enterprising private investor rental property probably wins.

gibsonf1• 3 years ago

In the current market, you can invest and make interest in gold and silver: https://monetary-metals.com/

Aeolun• 3 years ago

I don’t imagine you’d ever sell these, but what beats having a gold bar in your home? A very tiny one, but still.

codq• 3 years ago

I dunno, a 1956 Fender Stratocaster, maybe?

Something you can actually do something with?

cammikebrown2• 3 years ago

Anything with utility? Anything at all?

dahfizz2• 3 years ago

Laypeople hear professionals talk about how gold is a good investment, but they don't realize that professionals are trading gold ETFs and futures. Ill informed lay people then go buy a gold bar from Costco.

bluGill7• 3 years ago

For laypeople there are two reasons to trade gold: to show it off, or in event of society collapse. Both of them require you to have the physical gold in your possession. Professionals can trade gold futures and make money, but that is a very different type of investment that laypeople generally should stay out of because of how complex it is.

trgn• 3 years ago

Maybe it's better understood as plate, not coin. Dishwear put it in a burghers display case most of the year, that can, in times of war or distress be used as money. It has a sentimental value primarily, nonetheless, it has a veneer (pun intended) of true intrinsic value as well.

marcosdumay6• 3 years ago

People value those when they don't trust the finance institutions to keep their paper-gold promises.

Why people are distrusting those institutions, and on the US for all places... that's a question for sociology or psychology. I strongly suspect the social network cultural bubbles are behind this, but don't have much to say there.

(Anyway, I'm not an economist, but I've studied it a bit. This question is quite simple anyway, and it's something that has happened before, so it's pretty well covered.)

spapas822• 3 years ago

Here in Greece when people want go they'll go to a bank and buy British gold pounds (https://en.wikipedia.org/wiki/Sovereign_(British_coin)). I'm not sure there's a limit; you can buy as many as you want.

Symbiote2• 3 years ago

In Britain they're called "gold sovereigns", though I've never heard of anyone owning one — only from references in James Bond films and so on. I wasn't aware the nominal value was £1.

nly• 3 years ago

Lots of wealthy buy these by the tube. Being legal tender they are free of VAT and CGT on sale, which isn't true of investment grade gold biscuits.

pjc507• 3 years ago

The Q suitcase with the 50 gold sovereigns from From Russia With Love, was it?

Ironically the plot of Goldfinger relies on something which no longer exists: capital controls. The evil Auric Goldfinger was trying to circumvent British control of the export of money by hiding gold in car panels.

spapas822• 3 years ago

I found a bank web page (in english https://www.piraeusbank.gr/en/idiwtes/ependyseis/agora-polis...) with more info about buying gold sovereigs. A gold sovereign is sold by the bank at 480 euros (https://www.piraeusbank.gr/en/Idiwtes/Epitokia-Deltia-Timon/...)

This is very popular here because gold sovereigns here in greece are traditionally given as presents from close relatives on very important moments like marriage, child birth etc (i.e when a child is born its grandparents will give a gold sovereign to its parents)

vinni2• 3 years ago

Sounds like Indians. The craze for gold in India is unbelievable. It’s common thing for Indians to buy gold from middle east and bring it to India.

defrost14• 3 years ago

Something I like about India is they actually use gold, unlike many other gold purchasers.

India is a great source for beaten leaf gold - you can buy "books" of hand beaten tissue thin gold which is useful both for gilding idols and for other craftwork (eg: glassblowing).

alsodumb• 3 years ago

This is something I haven't thought of! Growing up in India, I know that majority of the Indians have their gold in the form of jewelry, and man I've seen people with so much jewelry it's borderline insane (coming from a guy who'd call himself minimalist). I certainly haven't seen people in any other country use gold/jewelry as much as Indians do.

Cerium• 3 years ago

These bars are being posted on Xiao Hong Shu with quite a lot of comments and interest.

Dig1t• 3 years ago

Rose noted that the company seems to have accelerated its offerings of dried foods and other survivalist goods at a time when worries about the future are running high
For example, the company markets a 150-serving emergency food preparedness kit that could come in handy, you know, just in case. Gold meshes with that type of product.
“They’ve done their market research. I think it’s a very clever way to get their name in the news and have some great publicity

This is the crux of the trend. I actually pick up one of these food preparedness kits every time I make a trip to Costco. They have a 25 year shelf life and have 25 servings of food. At $60 each (in the store, the online price is higher for some reason), that's the cheapest insurance policy I can think of, I'll take it.

But really they are cashing in on the growing sense of uncertainty about the future that many Americans are feeling.

NoNotTheDuo• 3 years ago

At $60 each (in the store, the online price is higher for some reason)

Shipping is included in the online price.

codersfocus3• 3 years ago

A couple days ago I was admiring the heavy aluminum pan I was throwing out because of nonstick coating issues.

Over a hundred years ago, that pan would have been something only for the most wealthy in the world.

Only a matter of time before the same happens to gold

prpl• 3 years ago

People will be irrational about gold longer than civilization can remain solvent

codersfocus3• 3 years ago

Not if we can figure out how to bring tons of it down from the heavens

dvh• 3 years ago

Aluminum is 3rd most abundant element in earth crust. Gold is 75th most abundant. I don't think so.

https://en.m.wikipedia.org/wiki/Abundance_of_elements_in_Ear...

sambazi4• 3 years ago

pure gold does exist in nature, pure aluminum not so much

rewmie4• 3 years ago

Aluminum is 3rd most abundant element in earth crust. Gold is 75th most abundant. I don't think so.

If you want to cite wikipedia, you might want to cite the article on the history of aluminium, where it says in no uncertain terms that aluminium was more expensive than gold prior to the development of industrial refinement methods in the 19th century.

https://en.wikipedia.org/wiki/History_of_aluminium

codersfocus3• 3 years ago

Who says anything about Earth's crust? I am talking about space mining. I can see gold crashing in 100 years just like aluminium.

bilekas• 3 years ago

I'm no so sure. Gold has always been used as a mechanism for intrinsic value. While the dollar is not backed by the dollar anymore there is still sentiment around the world that gold is the relaible asset.

Gold has an important economic role as a means of exchange should currency collapse. So I wouldn't see it going anywhere anytime soon. Until maybe i have a gold skillet that I'm throwing out someday!

BirAdam2• 3 years ago

Just a bit pick, there’s no such thing as intrinsic value. All value is subjective. Gold has strong and common utility aiding in its valuation, but there is no intrinsic value.

denlekke• 3 years ago

i wonder if people are buying these to meet minimum spend requirements for credit card sign up bonuses and reselling right away("manufactured spend")

robertk• 3 years ago

Costco only takes cash and debit, not credit.

bluetidepro• 3 years ago

Huh? That’s not true at all. I use my credit card at Costco all the time.

Foxhuls2• 3 years ago

Costco accepts all VISA credit cards and offers a Costco Citi VISA card

aspyct• 3 years ago

I struggle to find the value in keeping gold.

You can't eat it.

You can't use it as a tool.

You can't even buy groceries with it (well at least today. Point is: it's not a liquidity).

But yes, maybe you'll be able to make a profit in the future, by selling it to people who can't eat it or use it as a tool either. Or I guess trade it to save your life in a hypothetical future scenario.

It's just a weird way of keeping value. Wouldn't you rather buy a piece of land? At least you can pitch your tent or grow potatoes there.

Am I missing something?

febeling• 3 years ago

Durable, portable, no counterparty risk.

Hendrikto3• 3 years ago

Not printable at will, fungible.

TechSquidTV• 3 years ago

Could you not say the same thing about cash? The one difference here is it a defacto nation-agnostic currently that can (because we decided to) be easily traded nearly anywhere in the world. One advantage of it is the relatively fixed supply. It's still all made up but at least you can touch it and carry it with you. Land is great, but you can't take it with you.

rewmie4• 3 years ago

Could you not say the same thing about cash?

Cash is how taxes, payments for state services, public workers salaries, and public investments are specified. If the goal of cash is to serve as money then those all on themselves already set very concrete measures of value.

rullelito2• 3 years ago

Its value has gone up in most currencies in most time frames. People don't buy gold to buy groceries, to eat it, or to use it as a tool. They buy it so that 20 or 30 years later it has roughly kept its value, i.e. it has performed much better than holding currency.

Buying land requires maintenance, and probably comes with some ongoing tax implications.

herbst2• 3 years ago

Also 'anyone' knows which land you own, nobody knows how much gold you hide in your closet.

herbst2• 3 years ago

Holding Gold is kinda just like holding a foreign, well accepted, currency. As many unofficially countries use dollars because they are more stable than their own currency.

You can buy and sell gold anytime at the bank (at least here in central Europe) just like any other currency.

So if you don't trust your own currency it kinda seems like a logical next step. Should the dollar crash it's likely gold won't crash at the same rate, at least not for long.

AdamN5• 3 years ago

What's the spread in a local bank for different transactions sizes (100g, 1kg, etc..)?

cvccvroomvroom• 3 years ago

US inflation is about to run away long-term but Costco's gold bars are only useful to conspiracy theorist preppers, bribing Sen. Bob Menedez, and money launderers. (Bob only accepts 1 kg bars though.)

mrkeen• 3 years ago

Regardless of the price, gold is selling like hotcakes

This is symmetrical / zero-sum, right?

Consumers are (allegedly) buying lots of gold for $x. And Costco is getting rid of lots of gold for $x.

adamredwoods2• 3 years ago

I think Costco is making profit from selling these, but their margin is smaller than other places. I wonder how they paid for transportation? Gold is not light.

AdamN5• 3 years ago

What's the real spread on these things (i.e. how much can you sell the gold for directly after you buy it)?

adamredwoods2• 3 years ago

Well... you cannot divide gold, unless you are using it specifically for barter. In today's market, if you split the gold bar, people will buy it from you at a lesser value than if the bar was whole.

If you sell the gold whole, I don't know of anyone that will buy it for it's true value in weight.

The best strategy for gold is buy and hold until the buyers will offer more than what someone bought it for.

ProllyInfamous2• 3 years ago

Physical gold is absolutely a "long-term" strategy.

IMHO, coins from reputable national mints are best b/c easy to verify w/o assay.

silent_cal• 3 years ago

It's based on the current spot price. Depending on the form of the gold, you can sell very quickly to a trader at a little higher or lower than spot, I'd say 1-2%?. You'd get more if you sell directly to someone, but that's risky of course. Retailers sell at a premium above spot, around 3-4% for regular bullion and more for coins like American Eagles or Maple Leafs.

nwiswell2• 3 years ago

This is strange, apparently they're selling at a significant loss?

Current online price, $1930. Spot gold, $1872.59. So a little less than a $58 premium.

My credit card gives me 2% back, and my Costco membership 2% on top of that, for a total of 4%. I assume that Costco probably pays a bit more than 2% for card processing, and of course they're the ones actually paying me the 2% back from the membership.

So that's at least 4%, not including the minter's profits, shipping and security costs, warehouse worker wages and overhead, insurance, shrinkage, etc, which are surely at least a few percent more of the sales price.

But just 4% of $1930 is $77, meaning I would recognize a hypothetical profit in an immediate spot sale of $77 - $58 = $19 per bar. Costco's actual loss is certainly more than that, realistically probably more like $50+ per bar, or most likely $100+ per member.

Weird. The article mentions preppers, I guess they really want them as members.

worstestes• 3 years ago

"Costco's credit card policy is all about saving money. It negotiates a partnership agreement with a single payment network in exchange for much lower processing fees. As part of its current deal with Visa, it pays transaction fees of only 0.4%. By saving on fees, Costco is able to keep prices low."

https://www.fool.com/the-ascent/credit-cards/articles/why-do...

They actually secure a very nice low rate via their credit card policy

nwiswell2• 3 years ago

Fascinating. Visa-subsidized gold I guess.

xnorswap• 3 years ago

By not demanding better legislation, you're still being ripped off. What you describe as a "very nice low rate" is higher than the legislated EU wide limit.

https://eur-lex.europa.eu/EN/legal-content/summary/fees-for-...

dkjaudyeqooe3• 3 years ago

The cashback from cards isn't pad by the retailers, it paid by the issuing bank and consequently by the poor sods who carry a balance at rates up to 36%.

Costco's cashback is probably some variation of the same scheme, or a similar loyalty scheme.

So ultimately Costco only pays the processing fee of 0.4% or whatever.

chewmieser• 3 years ago

I was wondering why these were selling out like that… I see gold for sale occasionally @ spot price but I’m not personally interested.

But with the 4% you mention it makes a lot more sense.

ehsankia• 3 years ago

Other than what the others have said about credit card fees, I thought in general the whole business plan of Costco was to basically sell things at nearly no profit, and make most of their money from the members fee.

eva_cananim• 3 years ago

My understanding is that holding physical gold is a big hassle when you want to sell. Sensible buyers will want to verify that it is real and not gold-plated tungsten.

Fake gold bars are common.

If you want to hold gold as a hedge against high inflation then you want "good delivery" gold, which stays in a vault with chain of custody records.

ZiiS• 3 years ago

Unless high inflation topples the banks.

SilverBirch• 3 years ago

And if the banks topple... good luck finding someone who will take your gold.

koheripbal• 3 years ago

If one bank collapsed you can collect your non-can assets because they are custodians not owners.

If the entire system collapsed then you should be holding food, not gold.

0cf8612b2e1e2• 3 years ago

That’s exactly my question as well. If you turned around and immediately tried to sell the bar, what kind of loss is likely? The dealer is not going to trust a random lump of gold is legit, so they have to have some testing/risk to hedge.

ximon77777• 3 years ago

If only there was a way to teleport something with the characteristics of gold over the internet and a simple hash check to verify its purity and if there was no elasticity in supply in relation to demand. That would be so awesome.

mcbrienollie• 3 years ago

I think there are two perspectives on this. Either this is a very good PR campaign so that these retail companies can sell literally anything to any customer. Or people are concerned about the inflation rates so that they went back to the roots of the USD which is gold. In both of the cases, this should be researched in-depth

j7ake• 3 years ago

I wonder if one can arbitrage using credit card to buy gold then sell it back later.

If you assume gold prices can fluctuate a few percent, one can imagine making profit purely through the credit card rewards.

Essentially credit card funded benefits.

extraduder_ire• 3 years ago

I'm wondering if these are exempt from costco's legendary return policy.

I'm just imagining someone walking in and asking to return some items, then plonking five of these on the counter. Granted, From what I've heard, ~$10k sales/returns at costco are not that uncommon.

kenneth2• 3 years ago

I used to buy gold bullion as a sneaky way to get credit card points on the cheap (and then use them for first class flights around the world). You could usually do the trade profitably and quickly and quite safely with insured shipping via USPS. $50k at a time. It was a bit sketchy to have that much in bullion at home, and I quickly got bored of it.

The things you do when you're young…

uptown• 3 years ago

Who would you sell the bullion to to cash out?

icepat2• 3 years ago

Somehow when I was about 13 I ended up buying about 2k worth of silver in various places when spot was about $15 USD. One place was even an antique coin shop in my hometown. When spot went up to $20 a bit later, the same vendor bought it all off me at market price. Precious metals are a strangely easy thing to liquidate.

One of the strangest financial anecdotes of my life. To this day I wonder what the vendor thought seeing a literal child buying bars of silver bullion, then selling them at a 25% markup later.

kenneth2• 3 years ago

There are various precious metal trading companies that will buy the bullion from you at close to spot if it's kept in its original assay and has documentation. If not in assay, they will have to test its purity and potentially remelt it so that adds to the spread.

infecto2• 3 years ago

Did the same with those $1 US coins when the mint was allowing you to purchase them for $1 free shipping. We would get as much as possible and then turn around and deposit into the bank.

manonthewall5• 3 years ago

why would you pay $1 each for $1 coins and turn around and put that in the bank? I mean what's the purpose? I could see if you were keeping them as collectors items that might be worth more in the future, but once dropped in the bank you're back to where you started??

jquery• 3 years ago

We can probably thank Senator Bob Menendez for this. After getting indicted (again!) for taking bribes, his defense is that owning physical gold bars is a great idea.

As an aside, unfortunately for Bob they have him dead to rights this time, there's not gonna be a hung jury.

op00to• 3 years ago

My dad, near the end of his life, was "convinced" by his UBS money managers to move most of his assets into gold. He had a signficant amount of money, and this yielded a major payday for the fucktard at UBS that told him to do it. I can't see any reason for it!

icepat2• 3 years ago

That's really strange. I've spoken to UBS investment managers, and they're incredibly cautious about everything they suggest. There's a lot of red tape, almost wonder if something dodgy was going on.

jabroni_salad• 3 years ago

and they're incredibly cautious about everything

Have you ever heard a precious metals ad? The line between cautious and paranoid can wear thin, and that's who the target market is.

TheHumanist2• 3 years ago

Are USB money managers fiduciaries?

fredgrott• 3 years ago

Note, folks we normally find it an expansive lesson to speculate on those items with huge store costs such as Oil and Gold.

In case of gold, part of the store costs is the fact that its not legal tender and direct gold ownership has several large obstacles. Not to mention gold coin where the cost to take that non-pure gold and convert it is expensive.

If you are looking at this buy a meal for a commodity trader and use that meal time to get an education on these issues before jumping into it!

thelastgallon• 3 years ago

Government can take away all your gold: https://theconversation.com/how-the-us-government-seized-all...

https://en.wikipedia.org/wiki/Executive_Order_6102

antihero• 3 years ago

What if you hid it well? How are they going to find it?

kotaKat• 3 years ago

"Hi, Costco. We would like to subpoena you for the customer records for every person that bought gold. Note that 'would like to' means 'are going to, and you will comply'. Love, the US Government."

jihadjihad• 3 years ago

The limitation on gold ownership in the United States was repealed after President Gerald Ford signed a bill legalizing private ownership of gold coins, bars, and certificates by an Act of Congress, codified in Pub. L.Tooltip Public Law (United States) 93–373,[1] which went into effect December 31, 1974.

[ibid.]

manonthewall5• 3 years ago

Sure but it can just as easily be passed again.

spuzz2• 3 years ago

The government can do whatever it wants as long as they pass a law and you respect it.

bluGill7• 3 years ago

The government has armies so not respecting whatever laws they pass is hard and potentially deadly. In some cases it is worth it, but typically people are better off respecting whatever laws that are put in place.

shyn33• 3 years ago

Hacker News users are always wrong when it comes to things that matter. This is not going to age well.

Going to wait for gold to drop as that's what always happens with HN topics like Bitcoin and Tesla and DropBox and so many others.

The next year buy it at half and hold for 10 years seems guaranteed.

Funny how Americans who voted Biden in probably still think they have 10% inflation when Inflation is almost 40%.

Going to be fun.

maerF0x03• 3 years ago

It's a trick of currency risk though. The denomination can make things weird.

The price of a gold piece could be $1000USD or $100USD . But if it buys you a loaf at either point of time, has the gold changed in value?

I have a joke that I believe BTC is going to $1M USD. But my fear is that so is a price of bread.

To explain the joke, I'm suggesting that Bitcoin might hit $1M each, but that it will actually be nearly worthless compared to todays purchasing power (alongside the USD)

shyn33• 3 years ago

That's what happens to all currencies once people lose faith in them. Being invested in US Dollars means you trust the federal reserve and the U.S. president and that's got to require an absurd level of naivety based on the recent and historical events.

blamestross• 3 years ago

Gold got it's reputation before we had efficient aluminum production methods. For a while, aluminum was the most useful and valuable metal on earth, it caps the Washington monument for that reason. Nothing has really changed other than gold is more scarce. In a "prepper" situation, aluminum ingots are fundamentally more useful for every use but trade, and it's trade value is only because it has trade value. It isn't like they will be making new electronics after the fall.

Over 100 years of the value being propped up by a social narrative alone. Boggles the mind. Reminds me of no-vote no-dividend stocks.

Dowwie• 3 years ago

Certain cultures are known for gifting gold bars at weddings. Professional thieves know this and target the houses of families meeting this demographic. There's been an organized crime syndicate in my part of New Jersey that has been successfully hitting houses. Local detectives do nothing, aren't any help at all.

gs172• 3 years ago

Are there any news articles about that? Bob Menendez has taken over all searches for "New Jersey" with "gold bars".

manonthewall5• 3 years ago

"gold bars" "new jersey" -"menendez" robberies. ?

manonthewall5• 3 years ago

why wouldn't you put them in safety deposit boxes? I know there are issues with that but seems safer than under your mattress when it's know that thieves are breaking in and stealing them.

greenie_beans• 3 years ago

i came hoping for some good ideas about how to prepare for societal collapse.

left with the knowledge of arguments about storing gold for collapse, and that i might be an idiot for preparing for a collapse. also have some knowledge of argument totally unrelated to "costco gold bars are selling out within hours"

luv u hacker news.

ps wut i do prepare for collapse ?

kouru225• 3 years ago

Aren’t cigarettes a more stable currency?

xnx• 3 years ago

The only good reason to buy gold is to make an extremely expensive set of dumbbells.

Costco gold bars are selling out within hours

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