GOLD buyers have been warned that getting a return on their money from the precious metal is very different to trading stocks after a big spike in buying.
There has been an increase in the purchase of gold as people look to invest their money in something that has value, fearing that regular money will depreciate due to an unpredictable economy.
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People who want to buy gold and sell it quickly for a profit, or for what they originally paid for, may be disappointed.
“It’s Not Like Trading Stocks,” New York-based appraiser Lark Mason counted Wall Street Journal.
“There is friction between what you pay and what you actually receive.”
Tom Graff, chief investment officer at Facet, a wealth advisory firm, said people should expect to lose about 5% of what they paid for if they try to sell their gold bars after a few months of buying them, according to the WSJ.
But there are some ways to ensure you’re using your purchased gold correctly.
COSTCO GOLD RUSH
In December 2023, Costco announced that it had sold $100 million worth of gold bars in its fiscal first quarter and a recent update from Wells Fargo analysts shows that figure has increased to $100-$200 million per month, CNBC reported.
Costco gold only debuted in August 2023 and has seen great success in a short period of time.
“You’ve probably read about the fact that we’re selling 1-ounce gold bars,” Richard Galanti, Costco’s chief financial officer, said in December. Fox Business reported.
“We sold over $100 million worth of gold during the quarter.”
Edward Kelly, a stock analyst at the bank, insisted that the Costco gold rush should be scrutinized carefully and not ignored.
This is due to their aggressive pricing and customer trust.
“COST’s accelerated posting frequency, rapid online product sales and robust monthly eComm sales suggest a strong increase in momentum since launch,” Kelly said on Tuesday, CNBC reported.
GOLD OF JUDGMENT
There was also an increase in the purchase of gold, out of fear that an apocalyptic situation was approaching.
Some warning signs that have heightened this fear in people include cell phone service outages and the upcoming 2024 election.
Jonathan Rose, CEO of Genesis Gold Group, told The US Sun in March that these factors caused an “absolute surge” in gold sales.
But people who buy gold in fear of a global crash seek to hold gold for a long period of time – or when the apocalyptic situation ends – so they can continue to have wealth.
Gold could also be used as a bartering tool if money is no longer valuable and they need to get their hands on something, Rose said.
“In terms of staging, preppers want gold, and preppers want small-value gold coins and small-value silver coins – something tradeable and something negotiable,” Rose said.
“So we’ve seen a rise in small denomination coins, which are considered more tradable/tradeable, and there’s been a huge increase in that, like an absolute increase in that type of metal.”
Gold has been seen as a “safe haven” precious metal for centuries, which has added to its recent appeal.
Who is hoarding gold and why.
Gold expert Jonathan Rose, CEO of Genesis Gold Group, tells The US Sun who is hoarding and the benefits of it
- Rich Individuals and Elites: Millionaires, technology executives like Mark Zuckerberg and Sam Altman, and professional athletes are among those hoarding gold for doomsday preparations.
- Concerns about economic collapse: The increase in gold purchases is fueled by fears of dollar devaluation and a general economic recession.
- Preparing for Various Scenarios: The current surge in gold purchases is attributed to concerns ranging from the 2024 presidential election to recent AT&T power outages, which some fear were cyberattacks.
- Role of gold in exchange: Gold is seen as a valuable asset for exchange in an apocalyptic scenario, where traditional currency may lose its value.
- Preference for small denomination coins: Buyers are increasingly looking for small-denomination gold and silver coins, which are considered more negotiable and easier to trade.
- Gold as a tradable currency: In an apocalyptic situation, gold is seen as a more reliable currency than paper money, capable of guaranteeing essential goods and services.
- Gold as a symbol of value: In times of crisis, gold has significant value as a tangible asset, leading individuals to store it for potential future use.
“I think these people are realizing that we don’t have a crystal ball per se, but we do have a good roadmap and they are looking at the problems that the economy is facing right now,” Rose said.
“And the dollar losing value, there’s just the general economic concern of fighting inflation and that’s why a lot of people will move to a safe haven.”
KEEP/SELL GOLD
Gold can be useful in increasing and maintaining wealth in several ways.
But people who are taking advantage of gold’s rise to try to make a quick profit may not be investing their money in the right investment.
For example: Adam Xi, 33, bought a gold bar from Costco for $2,000 in October and recently was only able to make a return of $1,960 after selling it, the WSJ reported.
Xi received a return of $20 below the market price because he only held his gold for a few months.
In another situation, Luke Greib of Michigan kept his gold bar for nearly a decade, which he paid $1,500 for, and ended up selling it for $2,350, the WSJ added.
Graff, who works for Facet, said, “You need a long enough retention period to overcome that cost,” according to the WSJ.
This story originally appeared on The-sun.com read the full story
