Listen and subscribe to the opening bid on Apple podcasts, Spotifyor wherever you find your favorite podcasts.
It’s all about trust.
The country may have left the gold standard behind in 1971, but Costco (COST) shoppers have proven that gold is a red-hot buy this month.
Sure, it’s an investment, but it also reflects “this desire for real money,” economist and senior fellow at the Independent Institute Judy Shelton told Yahoo Finance editor-in-chief Brian Sozzi in his Opening Bid podcast (video above; listen below). “Gold is a kind of surrogate for the real economy and represents raw materials, but also the traditional role of money that you can rely on.”
The wildly popular Costco boullion was introduced to warehouse club members last year via 24-karat 1oz bars. The product has been flying off the shelves, with Costco reportedly raking in $200 million a month in gold bar sales. Demand is so high that the retailer has started offering platinum bars.
According to Shelton, the Costco gold rush likely has personal meaning for the financially skittish consumer. In recent years they have become accustomed to seeing inflation reach as high as 9%, while the US dollar lost 20% of its purchasing power. This has not exactly boosted American confidence.
Judy Shelton will be at Yahoo Finance’s Invest conference in November. Register here to attend!
The sudden rise in gold’s popularity could also have to do with consumers’ overall confidence in the precious metal and what it represents. “It is a meaningful unit of account. It works across borders,” she said. “It has universal value and is highly recognized.”
Precious metals such as gold are currently experiencing good developments. Year-to-date, the gold price is up 31.72% to $2,750 per ounce. Silver and platinum prices have risen by 41% and 3% respectively.
UBS Chief Investment Officer of the Americas Solita Marcelli said the gold price rally still has room, citing the potential for more rate cuts and worsening geopolitical tensions.
“Despite the rally, we believe gold’s hedging properties remain attractive. In addition to physical gold, investors can consider exposure through structured strategies, ETFs or through gold mining stocks. Investors unaccustomed to the volatility of individual commodities may also consider exposure through an actively managed strategy. that aims to deliver alpha relative to comparable passive indices,” Marcelli said in a note to clients.
Three times a week, Yahoo Finance Executive Editor Brian Sozzi fields full of insights and chats with the biggest names in business and markets Opening bid. You can find more episodes on our videohub or check your favorite streaming service.
Click here for all the latest retail stock news and events to help you better inform your investment strategy
