The Riddles of Gold: Navigating the Complexities of Trading Commodities in the Modern World

Gold has been traded for thousands of years, but it’s not really considered currency in the modern sense. While Costco sells millions of dollars of gold bars a month, with supply selling out quickly whenever released for sale, buyers are realizing the complexities of trading commodities after purchasing gold bars from Costco. Unlike stocks, selling gold bars involves a friction between what was paid and what is received. It is not as simple as finding a buyer who will pay the desired price, as some shoppers are finding out the hard way.

When Costco releases a batch of gold bars for sale, they typically sell out within hours as shoppers buy the precious metal at a small markup over its spot price. The allure of a hard-to-get item is created by the out-of-stock notices, but Costco continues to move a large amount of gold bars and silver coins each month, with estimates around $200 million. However, buyers are learning that buying gold is easier than reselling it, as trading commodities is full of complications.

Gold bars are classified as collectibles by Costco and the IRS, which may or may not retain their value over time. The IRS may demand a 28% cut of any profits made on gold held for over a year. With additional expenses like interest, taxes, shipping, and the hassle of finding a buyer, trading gold bars may not be worth the trouble even at Costco prices. Some shoppers have realized that buying and holding onto gold can be more beneficial than trying to resell it in the marketplace.