- Costco sells approximately $200 million worth of gold and silver bullion per month.
- Gold expert Taylor Huff says that with the popularity of gold, some buyers may not know what to expect.
- Huff recommended three things Costco shoppers should keep in mind when shopping for gold.
Gold and silver bars are among the hottest items at Costco this year, with the warehouse club selling its supplies to the tune of $200 million a month.
Each new batch of gold bars sells “within a few hours” of release, at a slight premium to its spot price.
The Wall Street Journal reported that some buyers took a crash course in commodities trading to try to make a quick profit on their gold stash.
But gold expert Taylor Huff, CEO of My Gold Advisor, says that’s not a good approach.
“Some people will just buy gold at Costco, even though they don’t know why they’re buying it, or what to do with it,” he said.
Huff shared his top three tips that buyers should remember when buying gold.
1: Gold is for savings, not quick profit
“You don’t buy physical gold to make a profit. You buy physical gold to store wealth and protect what you’ve earned,” Huff said. “You exchange your dollars for a physical asset outside of the banking system.”
Gold appreciates about 8% per year on average, according to JPMorgan, making it popular among those looking to protect against inflation.
But it also means that buyers should plan to hold onto the physical gold they purchase for at least a year, and preferably much longer. » said Huff.
An 8% increase would also help cover any discounts or expenses needed to sell gold for silver, since dealers don’t always pay spot prices.
2: Start researching resellers from the beginning
While waiting for gold to appreciate, Huff recommends researching and connecting with reputable dealers who would buy the bars at a fair price.
This can be particularly useful if circumstances require an earlier-than-expected sale of the gold reserve.
“When the time comes, you already have it in your back pocket. You’ve already looked at them and know the process,” he said.
Additionally, Huff said silver makes an attractive complement to gold for a simple investment strategy.
“One ratio we monitor is the gold/silver ratio,” he said. “When gold becomes cheaper relative to silver, you can sell some of your silver or exchange some of your silver for gold and turn around your portfolio that way.”
3: Keep it safe
Although silver can take up a lot of space, Huff says gold is surprisingly compact.
“You could put a million dollars worth of gold in two hands,” he said.
To secure small hiding places, Huff said a small fireproof safe — preferably bolted to the floor — is probably sufficient. A fully insured self-storage unit is also a reasonable option.
Larger holdings may be held in private depositories that specialize in precious metals and collectibles and include insurance.
“The approach should be that you would never want to sell it. You would never want to spend your savings, and gold should be approached the same way,” Huff said.
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