The retailer is moving deeper into the precious metals market
of ConsumerAffairsAfter successfully marketing gold bars to its members, Costco is moving deeper into the precious metals market by offering platinum.
The membership retailer has announced it will sell 1-ounce platinum bars for the current price of $1,089.99. Sales will be made online, along with the current offerings of gold bars and silver coins.
Purchases can only be made by Costco members but not everyone can purchase precious metals from Costco. Sales are barred in Louisiana, Nevada and Puerto Rico.
Costco launched gold bar sales just over a year ago and the timing was perfect. Gold prices are up a double digit percentage since then and is currently selling near its record high. Silver prices has also recently begun to rally.
Its been pretty good for Costco too. Wells Fargo reported in April that Analysts at Wells Fargo reported in April that Costco members are buying as much as $200 million worth of gold bars each month.
Platinum, along with copper and other commodities, has gotten more expensive in recent months. However, commodities prices are typically volatile and subject to abrupt change.
According to Costcos website, the platinum bars are 999.5 pure and minted in Switzerland. The limit is one purchase per membership.
Is platinum a good investment?
Platinum bars can be an attractive investment, but like any investment, they come with potential benefits and drawbacks. Unless you're an experienced investor with a tolerance for risk, it might be wise to talk to a financial advisor before taking the plunge, just as you would probably do for any major investment.
Here's a breakdown to help you decide if they're right for you:
Potential Benefits
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Hedge against economic uncertainty: Like gold, platinum is often seen as a safe haven asset. Its value tends to hold up or even increase during times of economic downturn, inflation, or geopolitical instability.
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Diversification: Platinum can diversify your investment portfolio beyond traditional stocks and bonds.
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Industrial demand: Platinum has wide industrial applications, particularly in the automotive industry (catalytic converters) and electronics. This demand can support its price.
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Rarity: Platinum is much rarer than gold, which can contribute to its value.
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Tangible asset: Owning physical platinum bars offers a sense of security and control over your investment.
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Liquidity: Platinum bars are generally easy to buy and sell, although liquidity can vary depending on the market conditions.
Potential Drawbacks
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Price volatility: Platinum prices can fluctuate significantly, potentially leading to losses.
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Storage and security: You'll need to securely store your platinum bars, which may involve costs for a safe deposit box or home safe.
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No yield: Unlike stocks or bonds, platinum bars don't generate any income. Your returns depend solely on price appreciation.
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Spread between buy and sell prices: You'll typically pay a premium when buying platinum bars and receive a slightly lower price when selling, which can affect your profit margin.
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Market manipulation: Like other precious metals, the platinum market can be susceptible to manipulation.
Things to Consider
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Investment goals: How does platinum fit into your overall investment strategy and risk tolerance?
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Time horizon: Are you investing for the long term or short term?
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Market research: Understand the factors that influence platinum prices, such as industrial demand, supply constraints, and investor sentiment.
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Reputable dealer: Buy platinum bars from a reputable dealer to ensure authenticity and quality.
Platinum bars can be a good investment for some, especially those seeking to diversify their portfolio and hedge against economic risks. However, it's essential to weigh the potential benefits and drawbacks carefully, conduct thorough research, and consider your individual financial circumstances before investing.
To put it plainly, don't invest any money you can't afford to lose.
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Information in this story came from Costco, AU Precious Metals,NY Gold Co.and Silver Bullion, among others.
Photo Credit: Consumer Affairs News Department Images
Posted: 2024-10-03 15:39:36
