Clark Howard

Should You Buy Gold at Costco?

If you know money expert Clark Howard, you know that Costco is one of his favorite stores. One thing that the retailer has been making headlines about recently is its sale of gold bars.

As a savvy shopper, you may be thinking about buying gold from Costco. Should you?

In this article, we’re going to tell you what you need to know about gold at Costco, including whether Clark thinks it makes sense to purchase it.

How Much Is a Gold Bar at Costco?

A 1 oz. gold bar at Costco.com sells for nearly $2,000, according to media reports. The bars are currently out of stock and price information is not available on Costco.com as of January 2024.

“Costco.com periodically is selling ounces of gold and every time they get another supply of gold and they put it online, it sells out in minutes,” Clark says.

Screenshot via costco.com

The item description for the gold bars is still online though. The 1 oz. old bars are 24kt and are available to members only with a purchase limit of two per membership.

Is It Good To Buy Gold at Costco?

"If you want to have some gold or precious metals, fine," Clark says. But he wants you to be clear on your reason for buying the gold.

Understanding the Reason Why You Buy Gold

The issue with many people who buy gold bars is that they believe it's an investment, which Clark says is not the case.

Gold bars are not an investment. Why? "Because, other than making jewelry, gold has no return on investment, like money," Clark says.

"What is gold for? Gold is a hedge against bad times. Nobody buys gold as an investment. Gold is not an investment. Silver is not an investment. Precious metals are not investments," Clark says. 

“People hold them as a store of value against the devaluation of traditional government currencies, worries about the world, and all of that,” he says. As a result, Clark says its popularity ebbs and flows with people’s feelings about the economy.

“So, in times of great worry in the world, gold and other precious metals tend to rise and at other times, when people feel more tranquil, then the value goes down,” he says.

Understanding the Buy/Sell Spread of Gold

Also, with physical gold, there’s a buy/sell spread that you’ll have to cover. The spread is the price difference between what you bought the gold for and what the market says it’s going for when you want to sell.

“There’s less of a spread buying the gold from Costco as normal, which is why people grabbed onto it,” Clark says. “But you’ve got to buy it, you have the spread on it, and when you go to sell it, you’re going to lose money on that spread, because you’re going to get less than what the buyers are paying for it.”

How Clark Likes To Invest

Clark's way of investing is generally through index funds, or exchange-traded fund (EFTs) equivalents in the stock market.

"Gold is something that I like to be held in electronic form, not physical form. Same thing with silver and other precious metals," Clark says. 

“I’ve been a big fan of funds where you don’t have the buy/sell spread to worry about. You don’t have to worry about storing it and you don’t have to worry about someone stealing it,” he adds.

Bottom Line

Shopping at Costco is worth it for a lot of things. Gold is not one of them, in Clark's view.

“Is it bad to own them? No, but only as a part of what you do as that hedge,” Clark says.

“My preference is electronic instead of something physical,” Clark says, referring to his investments. “Gold is not an investment. That’s very important.”

The post Should You Buy Gold at Costco? appeared first on Clark Howard.