Costco’s Gold Bar Frenzy: The Risks and Complexities of Investing in Commodities

Gold has been traded for centuries, but it’s not really considered currency in the modern sense. Despite this, Costco sells millions of dollars worth of gold bars every month, with supply selling out quickly whenever released for sale. Shoppers are drawn to the allure of a hard-to-get item, as seen by the out-of-stock notices that accompany gold bar releases.

However, buyers are starting to realize the complexities of trading commodities after purchasing gold bars from Costco. Unlike stocks, selling gold bars involves a friction between what was paid and what is received. It’s not as simple as finding a buyer who will pay the desired price, as some shoppers have discovered to their disappointment.

Gold bars are classified as collectibles by Costco and the IRS, which means their value may or may not retain over time. The IRS may demand a 28% cut of any profits made on gold held for over a year. With additional expenses like interest, taxes, shipping, and the hassle of finding a buyer, trading gold bars may not be worth the trouble, even at Costco prices.

Despite these challenges, many shoppers continue to buy gold bars from Costco each month, hoping to make a profit on their investment in the long run. However, it’s important for buyers to carefully consider the risks and potential complications before making any investment decisions involving commodities like gold.