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Warehouse retailer Costco made headlines late last year when it began selling 1-ounce gold bars to its members. There was so much demand for the precious metal, in fact, that the retailer had trouble keeping gold in stock, with inventory selling out within minutes of being added to the their website.
Costco has since added other precious metals to its list of available inventory, including silver coins, making it simple for its members to invest in physical gold and silver as part of their regular shopping routines. And, the introduction of these high-value commodities has made Costco’s venture into precious metal sales even more successful, with the retailer now selling between $100 million and $200 million worth of gold and silver each month, according to a recent estimate from Wells Fargo.
But the demand for gold, silver and other precious metals doesn’t stop there. Interest in gold investing has been climbing over the last couple of years, with demand for gold hitting an 11-year high in 2023. If you haven’t made moves to diversify your investment portfolio with gold and silver just yet, though, there are a few reasons why you may want to buy in.
Find out more about how gold investing could benefit you here.
Why you should buy gold and silver now
Investing in gold and silver makes a lot of sense in today’s economic environment. Here’s why you may want to consider adding these precious metals to your portfolio right now:
Precious metals can hedge against inflation
One of the primary reasons to invest in gold and silver right now is inflation. Inflation reached a 40-year high of 9.1% in June 2022, and while it has started to moderate, inflation remains elevated. According to the most recent inflation report, stubborn inflation hit a rate of 3.5% in March, still well above the Federal Reserve’s 2% target rate.
So how does that pertain to gold and silver investing? Well, gold and silver are assets that can offer protection against inflation, as their prices tend to rise when the purchasing power of paper currencies declines. And, the uptick in demand for these metals that occurs during periods of high inflation also typically helps to push the price higher, which is a trend we’ve seen over the last few weeks.
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They can diversify your portfolio
A well-diversified portfolio is crucial in any economic climate. Incorporating gold and silver into your investment portfolio can help diversify your holdings and reduce the overall risk of losses. That’s because precious metal assets tend to move independently of traditional investments, providing a degree of protection against market downturns or other issues that may cause the value of your other investments to decline.
The gold and silver supply is limited
Unlike paper currency, which can be printed at will, both gold and silver are finite resources, with limited and controlled global production. As demand for these metals continues to grow, particularly from investors and central banks, the limited supply can create upward pressure on prices. So, by buying in now, you could benefit from future increases in value.
These metals have intrinsic value
One of the key advantages of investing in gold and silver is that they are tangible assets. Unlike stocks, bonds or digital currencies, these precious metals have physical form and intrinsic value. This makes them a more reliable store of value, as they are less susceptible to the volatility and uncertainty that can plague financial markets.
The historical performance is promising
Over the long term, gold and silver prices have historically demonstrated the ability to appreciate, making them a smart choice for long-term investing. And while past performance is not a guarantee of future results, the potential for capital appreciation remains a compelling reason to invest in these precious metals.
The bottom line
With inflation still high, geopolitical uncertainty looming and a range of other factors driving increased demand for gold and silver, now may be an opportune time to consider adding these assets to your investment portfolio. And, the popularity of Costco’s precious metal products also suggests that the trend of investing in gold and silver is continuing to gain momentum, so savvy investors would be wise to take note.