Friday, October 20, 2023

Gold

Costco has been selling gold. The story says the bars generally sell out within 2 hours of each online announcement. I'm not a member--perhaps this isn't out of the ordinary for them and I just didn't know it. I was surprised.
"As soon as you purchase these gold ingots. You're already down 5, 6, 7, percent, which is the cost you pay over this the fair value, the spot price of gold. And then, if you have to go sell later on, then you're going to lose a similar percentage."

That doesn't make it sound like a great investment when the economy is more or less OK. After a crash, do you propose to buy eggs and milk with a bar of gold? Not quite as versatile as cheaper precious metals...

OTOH, their expert's advice seems risky. "If you want to invest in gold, Royal suggests buying into a fund that owns physical gold instead." If the economy is more or less OK, that might be an OK investment, and of course after a crash your peices of paper are worthless. But: Who guarantees that the fund actually has the gold it claims to? And even if there hasn't been double-counting between firms, recall Executive Order 6102.

Gold seems like a bet that the economy is going to go poorly, but not really all that badly. Gold funds seem like the same bet, with the additional requirement that there's no funny business with the funds.

If you gave me some, I wouldn't turn it down. I just wouldn't buy it as an investment.

5 comments:

Pictander said...

Gold, especially physical gold, isn't an investment as much as a precautionary measure. If society actually breaks down it's not of much use, but in the case of a serious financial disaster it could come in handy.

Assistant Village Idiot said...

Son #3 is in Nome with a good metal detector and gets a fair bit of gold when he gets the chance. That seems to me to be the way to do it. High entertainment, not depending on the money, but if the accounting job ever went away, between the gold and the king crabs and the caribou and the salmon, you could stretch for a while.

Korora said...

Pictander:
You mean, if your bank account cries, "Au!" ;รพ

Donna B. said...

WalMart is selling gold online too.

james said...

You're right! The markup varies quite a bit, I see--possibly having to do with the purity?