Costco gold

[technovelist]

Whenever there is a gold thread, there are likely to be claims that the premiums are too high on small purchases so that buying gold is a loser's game even if the price goes up.

However, if you are a Costco Executive member, you should be able to buy 1 to about 7 ounces of gold (depending on the specific offer) whenever they have an allotment to sell, at essentially no premium after rebates.

If you just look at the list price, it is usually about 4% over the spot price. But you get 2% back as an executive member and since I assume everyone here has a cash back credit card, you should get about 2% back from that card too (e.g., Fidelity's Elan card). Most gold dealers won't accept payment on a credit card without charging extra fees but Costco doesn't do that.

So after both of those rebates, you're buying for just about spot. Such a purchase can even be fairly lucrative if you have credit card spending amounts needed to get bonuses, as gold purchases add up quickly.

Now it is also true that they don't have gold all the time, but they seem to have been increasing the number of offerings recently.

In the last couple of weeks, they have had at least two such offerings although I haven't been checking every day.
The ones I've seen recently were:
1. 1 oz. Gold Maple Leafs, minimum 1, maximum 5.
2. 50 and 100 gram bars, minimum 1 of each, maximum 2 of each.
If you bought the maximum of both of those offerings, you would end up with about 15 oz. of gold essentially at spot.

Note that I'm not recommending buying gold, do your own due diligence, etc. But the claim that there's no way to buy small amounts without excessive premia is incorrect, at least for Costco Executive member.

Note: I just checked costco.com for "gold bar" and found that they are selling the Pamp Suisse 100g bar, maximum 2 per member, at $8,599.99, which at $2634.60/oz. calculates to a 1.5% premium. After receiving 4% back from the executive membership rebate and the Fidelity credit card, this means you are buying at about 2.5% under spot. And you can generally get at least 2% under spot from any reasonable dealer for a 100g bar in assay card, so you're not in the hole as soon as you buy.

[Baylor Boy]

How do you sell these and what are those transaction costs? How does the buyer determine the quality control?

I've never been a gold buyer of any kind, but I think I've heard that any gold you take possession of takes a valuation hit.

[heisenberg.]

The problem is the selling part, not so much the buying..

Edit: Baylor beat me to it

[retiringwhen]

Does Costco buy it back? If not, that is a sign.....

Reddit r/costco thread: https://www.reddit.com/r/Costco/comment ... gold_bars/

[retiringwhen]

Just like the thousands of gold ads i have seen in magazines since I was a kid.

[ClassII]

As someone with an elderly near-obsessive gold bug in the family I’m thankful for Costco.

They have scruples snd seem to offer a pretty straight shooting deal on gold. Certainly better the stuff they advertise on TV or even worse the commemorative coin racket.

Still, I dread the day when I have to pawn off a safe full of this stuff and just hope i don't get taken to the cleaners by some low life.

[technovelist]

How do you sell these and what are those transaction costs? How does the buyer determine the quality control?

I've never been a gold buyer of any kind, but I think I've heard that any gold you take possession of takes a valuation hit.

Bars in assay cards are acceptable as is to dealers.
As I mentioned above, Kitco.com will buy one of those from you right now for slightly more than the cost after rebates.
Here's the calculation:
100g bar from Costco.com, list: $8599.99.
4% rebates from Costco executive membership (2%) and credit card (2%): $-344.95.
Net cost after rebates: $8255.04.
Kitco pays, right now: $8305.12.

So if you bought one of those and sold it immediately, you would be up about $50, not counting the shipping to Kitco, which is about $50. If you want payment by bank wire that is extra ($40 for USA or Canada); a check sent by ordinary mail is free.

The purchase price is all-inclusive; Costco pays the shipping.
There are no other fees or costs, to the best of my knowledge.

[technovelist]

As someone with an elderly near-obsessive gold bug in the family I’m thankful for Costco.

They have scruples snd seem to offer a pretty straight shooting deal on gold. Certainly better the stuff they advertise on TV or even worse the commemorative coin racket.

Still, I dread the day when I have to pawn off a safe full of this stuff and just hope i don't get taken to the cleaners by some low life.

I've sold to Kitco and to some other dealers in the past. If you store your gold at the Texas Bullion Depository, as I do, you can sell it to their resident dealer (US Gold Bureau) for about the same prices as other major dealers, and you don't have to worry about shipping because they are in the same building as the depository.

[rogue_economist]

Far too much is made of selling gold. The point isn't to sell it, its to hold it as hard cash and pass it to your heirs when you die.

[technovelist]

Far too much is made of selling gold. The point isn't to sell it, its to hold it as hard cash and pass it to your heirs when you die.

Well of course, if possible. No capital gains taxes then either, at least according to current law.

[Baylor Boy]

As someone with an elderly near-obsessive gold bug in the family I’m thankful for Costco.

They have scruples snd seem to offer a pretty straight shooting deal on gold. Certainly better the stuff they advertise on TV or even worse the commemorative coin racket.

Still, I dread the day when I have to pawn off a safe full of this stuff and just hope i don't get taken to the cleaners by some low life.

I've sold to Kitco and to some other dealers in the past. If you store your gold at the Texas Bullion Depository, as I do, you can sell it to their resident dealer (US Gold Bureau) for about the same prices as other major dealers, and you don't have to worry about shipping because they are in the same building as the depository.

I had no idea such an entity existed as part of the state government. Thanks for the enlightenment. Annual storage fees of 0.5%.

[technovelist]

As someone with an elderly near-obsessive gold bug in the family I’m thankful for Costco.

They have scruples snd seem to offer a pretty straight shooting deal on gold. Certainly better the stuff they advertise on TV or even worse the commemorative coin racket.

Still, I dread the day when I have to pawn off a safe full of this stuff and just hope i don't get taken to the cleaners by some low life.

I've sold to Kitco and to some other dealers in the past. If you store your gold at the Texas Bullion Depository, as I do, you can sell it to their resident dealer (US Gold Bureau) for about the same prices as other major dealers, and you don't have to worry about shipping because they are in the same building as the depository.

I had no idea such an entity existed as part of the state government. Thanks for the enlightenment. Annual storage fees of 0.5%.

Yes, they don't advertise it very much but it's been operating since 2018.

[LotsaGray]

Far too much is made of selling gold. The point isn't to sell it, its to hold it as hard cash and pass it to your heirs when you die.

Well of course, if possible. No capital gains taxes then either, at least according to current law.

Is gold taxed at cap gains rate? I thought it was taxed as a collectible. A higher rate.

[technovelist]

Far too much is made of selling gold. The point isn't to sell it, its to hold it as hard cash and pass it to your heirs when you die.

Well of course, if possible. No capital gains taxes then either, at least according to current law.

Is gold taxed at cap gains rate? I thought it was taxed as a collectible. A higher rate.

It is a capital gain that is taxed at your personal rate or 28%, whichever is less, assuming you hold it for the 1 year LTCG period.
But it's still a capital gain, so you can set capital losses against it 1-1.
And of course the same holds true if you sell it at a loss; that's a capital loss that can be set off against any capital gains.

ETA: Also you can apparently donate "non-rare gold coins" (e.g., Eagles, Maple Leafs) to charity and take a deduction for the entire current value without ever incurring a capital gain liability. (See https://www.thetaxadviser.com/issues/20 ... l#fnref_26)

[privateer79]

How do you sell these and what are those transaction costs? How does the buyer determine the quality control?

I've never been a gold buyer of any kind, but I think I've heard that any gold you take possession of takes a valuation hit.

Bars in assay cards are acceptable as is to dealers.
As I mentioned above, Kitco.com will buy one of those from you right now for slightly more than the cost after rebates.
Here's the calculation:
100g bar from Costco.com, list: $8599.99.
4% rebates from Costco executive membership (2%) and credit card (2%): $-344.95.
Net cost after rebates: $8255.04.
Kitco pays, right now: $8305.12.

So if you bought one of those and sold it immediately, you would be up about $50, not counting the shipping to Kitco, which is about $50. If you want payment by bank wire that is extra ($40 for USA or Canada); a check sent by ordinary mail is free.

The purchase price is all-inclusive; Costco pays the shipping.
There are no other fees or costs, to the best of my knowledge.

indeed, this is why the Costco offers quickly get filled and disappear... people have been buying and flipping to local coin dealers to make a quick 50-100$... the speed of selling out seems to correlate pretty well with discount to gold Spot price... when there's like 100$ discount you can't buy it... when its ~30$ over spot, it sits online for days.

[bongo]

The purchase price is all-inclusive; Costco pays the shipping.
There are no other fees or costs, to the best of my knowledge.

Some states will charge sales tax

[technovelist]

The purchase price is all-inclusive; Costco pays the shipping.
There are no other fees or costs, to the best of my knowledge.

Some states will charge sales tax

True, and I should have mentioned that, although that should presumably apply uniformly in those states no matter whom you buy from.

There are also a couple of complaints in the Costco reviews that are worthy of note.
1. The sales tax situation can be messed up even for some people who live in states that specifically exempt precious metal purchases from sales tax.
2. The carrier sometimes leaves the delivery on the doorstep or equivalent even though the terms and conditions for the sale specify that it can't be delivered without an adult signature.
3. Some people say that the internal packaging (wafer assay card or coin tube) was mishandled and didn't arrive in good condition. Sometimes this was fixable by exchanging at the store for another instance of the same product even though the T&C say "no returns or exchanges".

These things can happen with other vendors too, though, and aren't exclusive to Costco.

[naturewalker420]

The purchase price is all-inclusive; Costco pays the shipping.
There are no other fees or costs, to the best of my knowledge.

Some states will charge sales tax

Sales tax on money is unconstitutional. Constitution states that gold and silver is for repayment of debts. That was also before Fed Reserve had control of monetary policy when each state was in control of monetary policy back when the dollar was backed by gold. Now its back by faith and credit... (ie backed by debt). Its not gold getting more expensive its the dollar losing value in purchasing power over time. Which even makes me think that capital gains is theft just like inflation as it steals purchasing power through the creation of more fiat. I dont have a costco membership but gold is getting into the mainstream. Especially being available there and Walmart. As for selling coin shops, sell back to online dealer, or eventually trade it for other assets when they are fair/ undervalued to the spot price of gold.

[Mr-et-Mrs-R]

Just to pass along an idea - Costco also sells the Instacart cards with a 20% discount ($80 dollars gets you $100 dollars of goods).
You can use those cards for *anything* Costco sells, including gold.

[suemarkp]

Sales tax on money is unconstitutional. Constitution states that gold and silver is for repayment of debts. That was also before Fed Reserve had control of monetary policy when each state was in control of monetary policy back when the dollar was backed by gold. Now its back by faith and credit... (ie backed by debt).

The constitution says no STATE shall make any Thing but gold and silver Coin a Tender in Payment of Debts. Don't see a restriction on the federal government there, just states. They shouldn't have just restricted it to states especially since the federal government can seem to do more now than just what was enumerated.

[naturewalker420]

Sales tax on money is unconstitutional. Constitution states that gold and silver is for repayment of debts. That was also before Fed Reserve had control of monetary policy when each state was in control of monetary policy back when the dollar was backed by gold. Now its back by faith and credit... (ie backed by debt).

The constitution says no STATE shall make any Thing but gold and silver Coin a Tender in Payment of Debts. Don't see a restriction on the federal government there, just states. They shouldn't have just restricted it to states especially since the federal government can seem to do more now than just what was enumerated.

Yes because states were in control of monetary policy until 1914 and we were on a sound money standard at the time. Dollar went from 1/20th of an oz of gold to 1/2600th of an oz of gold. 2T plus annual deficits. Can this continue indefinitely? Doubt it.