Metals Market Report Archive

The Mike Fuljenz Metals Market Report


Wall Street Journal Downplays Gold Boom With Costco Shortfalls

A recent article in The Wall Street Journal (WSJ) reported that buying gold isn’t very advantageous because of claims that it is hard to sell without suffering from “friction” – an ambiguous term possibly tied to the stock market but not associated with the precious metals industry. The article, which focused on the wholesale club Costco and its recent gold-selling boom, failed to give adequate information and guidance to gold investors.

First, the WSJ is heavily bolstered by money from big stock market and real estate companies and has traditionally panned gold and a positive investment source. In traditional fashion, rather than focus on the positive of hundreds of millions of dollars in gold being sold to novice and expert investors alike, the paper searched for reasons to dissuade them. Using the same tired sources while passing over true experts in precious metals has been a trend the WSJ appears to embrace when it comes to representing or misrepresenting the gold bullion market.

In reality, buying gold from Costco does come with some disadvantages like price, exchanges, a lack of expertise or guidance and a lack of adequate supply. Rather than indicate negativity towards gold because of Costco’s shortcomings, why not speak with real experts in the precious metals industry to tell investors the best places to buy and sell gold, silver and other precious metals? It’s not that hard to cover the entire story rather than plant a seed in investors' minds that gold is a bad buy. It absolutely isn’t!

Gold has risen 13 percent in 2024, so far. Silver is up 14 percent. The return on investment for precious metals is there, people just need a little guidance to help them know how to find the best deals, the best companies and what to watch out for.

Each May, the Gallup organization polls Americans on their favorite investment category and last year’s polls showed that gold surpassed stocks to become America’s second-favorite investing choice, after only real estate. This year, with gold’s huge rise and real estate’s fall as mortgage rates topped 7%, there may be a race for a new #1.

Let me share a story of J.A., who called our office: It turned out this man, who lives in Florida, went to Costco in search of some other items but when he saw Costco offered one-ounce gold bars for sale, he bought one for about $2,500. J.A. said he liked the product, so he went back later to get another bar but was told by Costco employees they were “sold out.” That is something you will never hear us say regarding gold bullion but it is frequently the case when attempting to buy gold and silver from Costco.

So, J.A. called us and spoke to one of our professional representatives, who is extremely knowledgeable in the gold and precious metals market. Upon speaking with us, J.A. got a one-ounce gold bar, which actually was less than the price he was charged at Costco and it included free shipping, insurance and our free replacement services if he wasn’t satisfied once his product arrived at his home. Our prices, due to our tight buy-sell spread and our personalized service, are why J.A. vowed he would shop with us when buying gold in the future. This gives rise to my quick 6-point list of reasons to buy from us, not Costco: (1) we have competitive prices, (2) we provide free shipping and insurance, (3) we buy back gold, Costco does not, (4) we offer a free exchange, Costco does not, (5) we employ experts in precious metals and numismatics, Costco does not (6) Costco frequently runs out of gold bullion, we do not!

Now, let me repeat some of my article from last week on why this person went to Costco – then came to us:

Don’t get me wrong. It is a net positive when there are more gold buyers in America and Costco is helping in the expansion of that pool by selling up to $200 million a month in gold bars, according to Wells Fargo.  History has shown us that the rise in gold buyers will result in about one in six bullion buyers becoming rare coin buyers. Costco will help stock the pool of coin buyers, but most first-time buyers will desire a two-way market, and they will find out that the only place to sell locally in most areas would be pawn shops, local coin shops or even ads for “gold buyers” in hotel rooms offering as little as 50% for rare coins, or a huge spot discount of 5% to 10% per gold ounce, or about $120 to $240.

We typically buy back gold at a little bit below spot gold prices and sometimes a little bit above spot, depending on the product. We actually buy back millions of dollars per month in products from our customers, as do several other authorized PCGS and NGC dealers but I feel no dealer has our total list of credentials. For instance, I have been involved with consumer protection in rare coins and precious metals for over half a century. I helped write the Consumer Alert on buying gold for the Attorney General of Texas and was selected as the 2021 ANA Dealer of the Year. My books, media appearances and newsletters on gold and rare coins have won “Best of the Year” awards from the Numismatic Literary Guild or the Press Club of Southeast Texas, or both. Finally, I have years of experience teaching fraud and counterfeit detection classes to law enforcement for the American Numismatic Association and the Numismatic Crime Information Center.

In closing, give Costco a pass and go straight to the experts. We won’t tell you we are “sold out” of gold bullion and you’ll never have to worry about where to resell your gold because we will buy it back at a fair price. Call us today to safely and easily buy or sell your gold products, including the one-ounce gold bars featured on the homepage of our website, like Costco is selling.

Important Notice: Costco is a registered trademark owned by Costco Wholesale Corporation. Our company's advertising may mention Costco but we are not affiliated with or endorsed by Costco Wholesale Corporation. Any references to Costco are purely for descriptive purposes.


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