Warehouse giant Costco is venturing into uncharted territory by selling platinum bars, following the success of its gold bar sales. The one-ounce platinum bars are priced at $1,089.99, slightly higher than the current market value of around $1,000 per ounce. This move is seen as a strategic expansion into the precious metals market, building on the $100 million in gold bar sales reported in 2023.
However, platinum is a distinct commodity from gold, with a stronger industrial presence. It’s used in catalytic converters for gas-powered and hybrid vehicles, as well as in certain medicines. Despite its versatility, platinum’s value has been stagnant, currently trading at a lower price than a decade ago.
Experts argue that platinum’s rarity and diverse industrial applications could drive its value up in the future. However, others are skeptical, citing the expected shift towards electric vehicles and the limited understanding of platinum among investors.
Financial advisors generally recommend investing in companies that utilize precious metals rather than buying the metals themselves. They also emphasize the benefits of exchange-traded funds (ETFs) over physical bars, citing concerns about storage, insurance, and liquidity.
Despite these reservations, some investors are drawn to the tangible nature of physical precious metals, driven by fears of economic uncertainty. Costco is likely banking on this sentiment, having successfully created buzz around its gold bar sales.
The company’s foray into platinum is seen as a calculated move to create brand recognition and attract new customers. As one analyst noted, Costco aims to create a “halo effect” by offering unique products that generate excitement among its members.
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