ALTHOUGH this has been going on for some time, UK newspapers have picked up on the fact the world’s second largest retailer, American brand Costco is now selling gold and silver bullion through its UK outlets.
It is not as if you can wander through their warehouse picking up much valued toilet rolls and then stopping for a 1 kilo gold bar priced at around £24,500 (€27,000) but there is plenty of choice from around 50 grammes to a kilo.
The problem is price as for the kilo gold bar (which is sold without vat) the price will change daily but will be in the region of 7 per cent over the daily spot and this is because Costco must be purchasing from a third party and therefore needs to make a reasonable margin on its investment.
If you buy 32 single ounce gold bullion coins like Krugerrands (to make a kilo) you will probably pay around 3 per cent over spot and you can also buy similar bullion bars and at around the same price so whilst it’s a good way for the company to obtain publicity, it’s not great for an investor.
They also offer silver at more than 25 per cent over spot but if delivery is taken within the UK then VAT is payable and there would have to be a lot of upwards movement to make that worthwhile.
Over the years the price of silver has been very erratic and in the 1970s, the price of one ounce of fine silver was double what it is today so as the saying goes Caveat Emptor (let the buyer beware).
In times of financial turmoil gold does have a tendency to rise and investors who do their research and know where to get the best rate to buy and sell have every chance of long-term gain or if very lucky and purchase on a rising market they could make a quick profit.