Sabrina Escobar of Barron’s reports that shoppers are snapping up gold bars sold by Costco Wholesale. Escobar writes:
Gold has never been more expensive. That hasn’t stopped shoppers from snapping up gold bars sold by Costco Wholesale.
The discount chain started selling one-ounce gold bars on its website and in stores last year. They have since gained a loyal following from casual shoppers and gold bugs alike, who are quick to snap up the bars on the rare occasion they’re in stock.
The retailer also sells silver coins, and most recently added platinum bars to its assortment of investment-grade metals. Gold sales grew by double digits in Costco’s largest quarter and were one of the biggest drivers behind the retailer’s nearly 20% surge in e-commerce sales. Given their popularity, Costco has limited the number of bars it sells. Members can buy up to five units per transaction, and each membership is limited to one transaction at a time. As of Friday, a Costco gold bar retailed for $2,689.99 online—and it was out of stock. […]
But if you already have your Costco gold bars, the tough thing now is deciding what to do given the record-breaking bull run of the precious metal. That question weighs heavily on Angel Groff, a 42-year old content creator and jewelry collector. Groff bought two bars on impulse at her local Costco last August for $1,949 each. With gold’s value, also called the spot price, now hovering at $2,650, she’s debating whether to keep the bars or sell them for a roughly 36% premium. […]
Whether you sell gold now or in 10 years boils down to your investment goals, said Global X’s Yates. But whatever the goal, sellers should keep one last thing in mind: profits are subject to capital-gains tax.
The Internal Revenue Service considers precious metals to be collectibles. While gains made on metals held for less than a year are taxed at ordinary income rates, any long-term gains are often taxed differently—and higher—than gains on assets like stocks or bonds. The rate on long-term gains on gold varies depending on a seller’s tax bracket, but they can be as high as 28% for people in the top tax bracket. The top rate for gains on securities is 20%.
Bullion buffs would do well to remember that all that glitters isn’t always gold.
Read more here.