Tags: costco | gold bar | inflation | dollar

Millennial 'Gold Bugs' Shop for $2K Bars at Costco

Millennial 'Gold Bugs' Shop for $2K Bars at Costco
Gold bars in Bangkok, Thailand with the impression of a dragon (Vichan Poti/AP)

By    |   Friday, 05 April 2024 08:16 AM EDT

Costco shoppers can now buy a $1.50 hot dog — and a $2,200 bar of gold — at the same time, and more are doing just that.

The warehouse retailer, which began selling gold bars last year, sold $100 million worth of them in 2023, and it now stocks silver, too, The Wall Street Journal reports.

The gold and silver, also available online, sell out in hours.

Inflation, COVID, the wars in Ukraine and the Middle East, the $34 trillion U.S. national debt, and the devaluation of the dollar, have all buoyed the appeal of gold, even among Millennials.

A surprising 17% of Millennials now own gold, according to State Street. Gen X and Boomers also invest 10% of their portfolio in gold.

“It’s just nice to have options when we don’t really know what’s going on,” says Julia Edwards, 29, who, along with her fiancé Craig Beauregard, 33, recently bought a bar of gold at Costco on a whim.

Priced at $2,069, it was $3 below the on-the-spot price in financial markets at the time. Plus, it was a Year of the Dragon edition, which the couple saw as an auspicious keepsake ahead of their wedding in June.

So, they threw it into their shopping cart, alongside a seven-pound bag of frozen chicken and a carton of Kirkland eggs.

Joe Roselli specifically signed up for a Costco membership to buy two $1,959 gold bars, the maximum purchase, in August. The 30-something resident of Florida said he bought the gold as a hedge against a potential economic collapse.

“I want something physical that I can hold,” Roselli said. “I’m protecting against a situation where there is hyperinflation.”

Gold has historically performed well when the economy drags. However, gold futures rose 13% in 2023, even as the U.S. economy continued to perform well and inflation slowed considerably.

In the past 10 years, gold futures rose 76%, while the S&P 500 rose 176%, which is why financial advisers discourage clients from putting too much of their portfolio in gold.

This year, gold has continued to hit new records, including Thursday, when it reached an all-time high above $2,300 per ounce on expectations for lower U.S. interest rates in 2024.

Jonathan Rose, CEO of Genesis Gold, says demand for gold has risen since President Joe Biden took office.

“The Biden administration has single-handedly sunk the dollar,” Rose tells Newsmax Finance. “Inflation in the U.S. has crippled the dollar.”

Then there is the issue of the national debt. “The U.S. debt per citizen was $43,000 eight years ago. That’s skyrocketed to $101,000. Debt does matter. You can only kick the can down the road so long before you will stub your toe,” Rose says.

The collapse of Silicon Valley Bank and First Republic Bank in 2023 and regional banks failing stress tests, have also piqued people’s interest in gold, Rose adds.

The BRICS nations (Brazil, Russia, India, China and South Africa), are flouting the idea of creating a new currency to compete against the U.S. dollar, Rose notes.

Russia and China contribute 22.1% of the world’s GDP, he points out. “These big economies can eventually move away from settling oil trades in U.S. currency. That will leave us on a small island, or alone,” Rose says.

“We don’t have a crystal ball, but the $34 trillion deficit gives us a pretty good roadmap,” he says.

There are many ways to invest in gold or gold futures, such as mutual funds that specialize in the yellow metal.

Many people like owning physical bars of gold, which Rose says is safe and, actually, liquid.

“It’s as liquid as cash — you can sell it anywhere in the world,” he says. Genesis sends licensed carriers to a seller’s home to pick up the bars. “Physical gold really is an extremely liquid asset, more so than gold mining stocks,” Rose says.

Costco sources its two-inch gold bars from Swiss-based refiner MKS PAMP and South Africa’s Rand Refinery, and ships them as insured UPS packages. A few select Costco warehouses also stock them in their jewelry departments.

Jared Nagano, a 31-year-old native of San Francisco, bought two Costco gold bars on a recent vacation in Las Vegas, and has been searching Costco stores around his home ever since.

“I trust Costco,” Nagano says. “And it’s such a good deal.”

© 2024 Newsmax Finance. All rights reserved.

Costco shoppers can now buy a $1.50 hot dog - and a $2,200 bar of gold - at the same time, and more are doing just that.
costco, gold bar, inflation, dollar
Friday, 05 April 2024 08:16 AM
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