It seems that Costco is selling gold at pretty much market price. As a small investor, that is a good deal.
That said, physical gold is a poor investment for most people. You can invest in gold other ways without taking physical possession. This is often available in smaller quantities as well ( less than an ounce ) which makes it more accessible. It can be easily sold again at any time for the market price.
Owning physical gold is risky ( it can be lost or stolen ) or expensive ( you have to pay to keep it secure ). It is also somewhat illiquid which means that you are unlikely to get what you think it is worth when you sell.
When you buy physical gold, you own a hunk of shiny metal. You actually have it ( good and bad ). If you buy a gold derivative, you have a piece of paper or computer entry that says you are entitled to the financial value of gold stored somewhere else—you may not even know where.
In today’s world, the computer entry is less expensive, more convenient, more secure, and more liquid.
So, why buy physical gold?
Honestly, other than the emotional or novelty value, the only real benefit of physical gold is if you believe today’s world may disappear or radically alter. If you believe computer systems or financial markets are likely to collapse, the a computer entry is not worth much. If you believe that the rule of law may fail, the contractual obligation of a company to pay you is not with much. If you believe the government may seize your assets, having them under the control of a government controlled institution is a risk. Any or all of the above could happen if the government collapses.
If you think you may need to flee the country before the banks open, concentrated wealth that you can fit in your pocket could come in very handy.
The classic thesis for gold ownership is that it is an alternative to cash for storing wealth and that, unlike government currency, inflation does not destroy its value over time. The truth of this is complicated.
So, are precious metals as an asset class a good investment? I am not going to give financial advice but gold adds diversification to a portfolio and having to a few percent may be valuable.
Does it make sense to buy physical gold from Costco? That is a totally different question.
Regarding the societal collapse point, I really doubt that gold would be much in that scenario unless you can escape somewhere where things are relatively “normal”, in a genuine survival situation, bread is worth more than gold
I bought 3 x 1 oz. gold wafers from Scotiabank back in 1994 for around $400 IIRC and forgot about them in my safety deposit box. I sold them in 2010 for over $1200 each at one of those “We buy gold!” guys when I was moving for work.
Technically you can invest in gold without having physical lumps of metal, but it seemed like a thing to do when I was young, didn’t have any expenses, and gold was at a historic low. Of course now that I’m curious, it seems gold is $2500/Oz, so not sure if now is the time to invest. I guess it’s kind of like how crypto-bros said crypto was a hedge against inflation. The cost for actual physical gold wafers included some extra fees even back in the nineties, so Costco’s price above the spot price isn’t too out of line.
yeah so again its really a joke around folks that buy gold for a collapse when it would be better to have something useful and the gold bar can't be easily subdivided. Im sure gold will be a thing even in a collapse but the modern cost of it is so high it makes no sense in a trade situation.
Which is why all the rich people are buying up land and property … an old farmer friend of mine once told me a long time ago, land is the most important thing to own, there’s only a limited supply, they don’t make it any more and there will always be someone who wants it. Especially when the world comes to an end
In an actual collapse situation, nobody is going to respect property rights. He may have a head start in that he’s familiar with his own land, but there’s only so much land a single person can defend and maintain (and it’s much smaller than even a hobby farm).
Best case scenario for farmers is that they mostly get left alone, and then someone (everyone) steals their crops just before harvest. It’s unlikely people will have that much foresight, so I expect it’s just going to be a bunch of fighting over farmland, followed by starvation because no one had time to grow anything.
Part of the process is not what you will be left with after the collapse happens. You are right, no one will care about property rights or ownership during and after a collapse.
Part of the process is in building wealth before the collapse happens. The wealthy are building and hording wealth of all types right now … property, hardware and shelter … while at the same time building monetary wealth that will help them after the fact. Whoever has the most wealth right now or right at the moment of the collapse will be the ones who will survive the longest.
Those that have little to no wealth right now or at the moment of the collapse will be the first ones fighting some ugly conflicts over food and water while the rich hide in their defended small plots of land.
The poor will do the fighting and dying among themselves while the rich will sit quietly watching the fireworks from far away.
So just so I can understand correctly: you read a comment, get confused about a detail (I thought Canada was metric!), do absolutely zero research, go straight to accusing the person of being wrong?
While there’s a lot of merit in that chart, precious metals (that aren’t being used industrially) are bought and sold worldwide in Troy ounces, which are heavier than imperial ounces. Also, there are only 12 Troy ounces to the Troy pound, which is lighter than the imperial pound.
You can buy precious metals in grams in consumer markets (i.e., Costco), but all major markets deal in Troy ounces.
Add comment