As the gold market continues to sizzle, some experts are warning that the party may soon be over. According to Kathryn Rooney Vera, chief markets strategist at StoneX, the yellow metal is starting to show signs of fatigue. “Gold has had an incredible run, but it’s getting a bit long in the tooth,” she said in a recent interview. “I think it’s time to take some profits and prepare for a potential correction.”
Gold has been on a tear this year, with prices surging 27% to a record high of $2,694 an ounce. The SPDR Gold Shares ETF has also seen a significant boost, rising 27% on the year. But Rooney Vera believes that the market may be due for a pullback. “Gold has been driven by a lot of factors, including geopolitical uncertainty and economic instability,” she said. “But at some point, investors are going to start taking profits and looking for other opportunities.”
One surprising contributor to the surge in gold demand has been Costco, the beloved warehouse club giant. The company began selling 1-ounce gold bars to its members last fall, and the product has reportedly been flying off the shelves. According to Costco CFO Gary Millerchip, sales of gold bullion have been a “meaningful tailwind” to the company’s quarterly earnings, with sales rising by double digits.
Analysts estimate that Costco is selling between $100 million and $200 million worth of gold bars each month, making it a significant player in the physical gold market. And with the company now expanding into platinum bars, it’s clear that gold is becoming a major business for Costco.
Traditionally, physical gold demand has been driven by central banks and other institutional investors. But Rooney Vera notes that the market is changing, with more individual investors getting in on the action. “We’re seeing a shift away from traditional safe-haven assets like Treasurys and towards gold,” she said. “It’s a sign that investors are becoming more risk-averse and looking for alternative ways to diversify their portfolios.”
As the gold market continues to evolve, one thing is clear: investors are hungry for exposure to this shiny metal. And with companies like Costco making it easier than ever to get in on the action, it’s likely that gold will remain a hot commodity for the foreseeable future.
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