Are Costco Platinum Bars Worth Buying? This is what financial professionals say.

After selling millions of dollars worth of gold bars, Costco Wholesale Corp. now to create the same buzz for another precious metal, namely platinum. But should investors take this into account?

Department store chain COST has started selling one-ounce platinum bars at a price of $1,089.99 each, slightly higher than the metal’s current value of about $1,000 per ounce on the commodities market. Costco’s push to sell gold bars began last year and has proven to be a huge success, with the company reporting sales of $100 million by 2023.

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However, platinum PL00 is a different commodity than gold GC00. The latter literally has all the glittering buzz: think items ranging from gold engagement rings to vodka with gold flakes in it. Gold has also seen an appreciation, rising from around $1,200 per ounce over the past decade to almost $2,700 currently.

Although platinum, like gold, is used in jewelry, it is more relevant as an industrial metal. It finds its way into everything from gas-powered or hybrid vehicles – particularly catalytic converter production – to certain medicines. That may make it more valuable from an investment perspective, but history has shown otherwise, at least lately: platinum’s current price of about $1,000 per ounce is actually lower than its price of about $1,250 a decade ago.

Edward Sterck, research director at the World Platinum Investment Council, told MarketWatch that the platinum price has been called into question due to expectations that electric cars will dominate the car market – and so there is no need for catalytic converters. But he argues that platinum could do well in the coming years for a number of reasons, including its other industrial uses and the fact that it is currently in short supply. However, he notes that platinum is significantly rarer than gold.

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Furthermore, Sterck said that unless you believe that all-electric cars are really going to become the norm in the near future, platinum will continue to have significant value in the automotive world because of those catalytic converters.

But not everyone is convinced that platinum is a great investment – ​​for many reasons.

For starters, many financial advisors shy away from the idea of ​​investing in metals as a whole, including gold and platinum, because they don’t have the same intrinsic value as stocks.

“We would rather invest in a company that does something with gold or platinum” than buy the metal itself, said Yusuf Abugideiri, chief investment officer of Yeske Buie, a financial firm.

Even if you see a place for metals in a portfolio – and many advisors view them as a hedge against inflation – the fact remains that most people understand gold much better than platinum, due to gold’s ubiquitous nature and popular appeal, brands advisors.

“Investors aren’t flocking to it,” said Michael Martin, vice president of market strategy at TradingBlock, a trading technology company. He added that it is also difficult to ignore the idea that the car market is likely to go electric in the long term.

Regardless, financial experts generally agree that if you want to own a precious metal for investment purposes, you’re much better off buying it in the form of an ETF, rather than in the form of a physical bar like the ones sold at Costco. sold.

That’s because owning physical platinum or gold means you have to worry about things like storage and insurance, not to mention the fact that it’s not nearly as liquid as shares in an ETF — meaning if it time comes to sell, you need to find a buyer and then make sure you get the metal to them.

Still, Jimmy Lee, CEO of the Wealth Consulting Group, a consulting firm, said there is always “a certain segment that just wants to own some physical stuff.” Like other advisors, Lee said it most likely has to do with the fear of an uncertain world — and thus the desire to have tangible assets at hand.

Clearly, this is the idea Costco should rely on. Ivan Feinseth, an analyst at Tigress Financial Partners who follows Costco, said it only makes sense that the company would start selling a new precious metal after the gold rush it sparked among its members.

Feinseth added that the platinum offering fits with Costco’s history of finding items that create buzz and build further recognition for the brand.

“They’re trying to create a halo effect,” he said of Costco’s approach.

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