Citigroup analysts predict gold will reach $3,000 within six to 18 months, with more buyers piling in amid Fed rate cut hopes and geopolitical tensions.
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Costco’s decision to sell precious metals has brought it golden buzz.
A Wells Fargo report stated that the bank’s analysts believe that the warehouse retail giant is selling between $100 million to $200 million in gold per month.
Wells Fargo suggested that the precious metal offering was a way to add value to the company’s brand noting that “it’s a very low-profit business at best.”
“We view the addition of gold/silver as a smart move for Costco, as it only reinforces its value position,” the report said.
The buzz around Costco’s offering has led to increased interest in investing in the metal, according to Zachary Scott, general manager of Wilshire Coin in Santa Monica, Calif. Scott said that he is seeing customers who are “less than typical” brought in after seeing gold being sold by “a trusted company.”
“It’s bringing in new buyers and interest, though not in massive amounts, who have seen the articles around Costco selling gold,” Scott said.
How much gold is Costco selling?
Using the estimates from the Wells Fargo report and an approximate price of $2,000 Costco sells between 50,000 and 100,000 ounces of gold per month.
USA TODAY reached out to Costco to inquire about the volume of gold it has sold and did not receive a response.
Gold prices since Costco started selling
After Costco introduced the 1 oz. gold bars to its website last October the spot price of the metal held steady around $2,000 until an upswing that started in February.
The metal made a run at the start of March that stabilized around the $2,175 mark in the middle of the month. Gold is experiencing another breakout that started at the end of March and has continued.
The spot price of the metal was $2,341.35 as of 9 a.m. ET Thursday, April 11.
Should someone buy gold?
Whether it’s a good time to buy gold depends on various factors, including your investment goals, risk tolerance and time horizon, the broader economic outlook, and forecasts about the gold market.
Historically, many people view gold as a hedge against inflation and currency fluctuations. Others see it as a store of value during economic downturns. At the same time, some may find diversifying a portfolio of stocks and bonds useful, given its low correlation to both assets.
“If you look at gold’s performance historically, it’s the kind of asset that should perform well through uncertainty, as it has done in five out of the last seven recessions,” said Joseph Cavatoni, chief market strategist for North America at the World Gold Council. “For people looking for a store of value and a portfolio diversifier, gold has a strong track record of delivering those qualities.”
Contributing: Tony Dong and Farran Powel USA TODAY Blueprint
This article originally appeared on USA TODAY: Costco gold sales increase interest in metal but doesn’t move market
Either gold shares rise from here or gold prices take a dive.
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As the Federal Reserve maintains a cautious stance on interest rate cuts, Bitcoin’s emergence as a ‘digital gold’ has garnered increased investor attention, setting the stage for heightened adoption expectations, Coinbase said in its latest market research on April 5.
Institutional Research Analyst David Han believes Bitcoin’s growing status as digital gold will attract new investors looking for a hedge against macroeconomic uncertainty.
According to the report, this perspective has gained further prominence over the past day against the backdrop of the Fed’s recent communications, which have led to a broader market recalibration, affecting digital and traditional assets alike.
Digital Gold
The Federal Reserve’s recent communications suggest a measured approach to future interest rate adjustments, a stance that has coincidentally seen gold outshine other asset classes. This development, Coinbase asserts, may cast Bitcoin in a favorable light among investors seeking alternatives amid inflationary concerns and interest rate uncertainties.
Han said the market’s hawkish reaction to the Fed’s recent commentary highlights a significant shift from the optimism at the start of the year, reflecting deeper uncertainties across financial landscapes.
Within this framework, Bitcoin’s resilience and potential for adoption come into sharper focus, suggesting a pathway through macroeconomic turbulence.
According to Han, the introduction of spot bitcoin ETFs in the US market represents a pivotal development, enhancing the flagship crypto’s appeal by broadening access and potentially stabilizing price volatility through increased institutional participation.
This milestone, coupled with Bitcoin’s comparison to gold in times of economic uncertainty, positions it uniquely as a safe haven for investors navigating the current climate of inflation concerns and geopolitical risks.
Growing acceptance
Han highlights the strategic significance of Bitcoin’s growing acceptance and the implications for market volatility and investment strategies.
The enhanced liquidity and investor base attributed to the Bitcoin ETFs marks a transformative shift in the crypto market’s structure, contrasting with previous cycles and suggesting a more mature phase of market evolution.
The broader crypto and DeFi sectors also reflect these complex trends, with developments like Maker’s Endgame initiative signaling rapid innovation yet inviting scrutiny over governance and risk. The ongoing dialogue within the DeFi community, especially concerning decentralized stablecoins, highlights the intricate balance between innovation, market stability, and regulatory engagement.
As Bitcoin navigates the implications of the Fed’s policies, its role and acceptance in the financial ecosystem are poised for significant scrutiny and potential expansion. The intricate balance of macroeconomic factors, investor sentiment, and technological advancements will continue to shape the landscape for Bitcoin and the wider crypto market.
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