In an interesting turn of events, Costco Canada is now offering bullion to its members — marking a new entry into the precious metals market. This move is likely to entice the casual and serious investors alike, but weighing the possible disadvantages before one decides to purchase gold or silver from a retail giant like Costco is key. Here, we will look at what this new offering is all about and why you might want to think twice before taking it up.

Overview of Costco Canada’s Bullion Offering

Costco Canada has added some gold and silver bullion products for sale as part of its varied offering of goods to its members. Known best for their bulk groceries and household items, Costco is now offering this precious metal as part of its member base. The bullion is available in various forms, such as bars and coins, making it accessible to different types of investors.

Think Twice Before Buying Bullion from Costco Canada

1. Premiums Over Spot Price

One of the main disadvantages of actually making a purchase of bullion from Costco is the fact that the premiums one may pay are way over the spot price. Dealers typically will add a small mark-up over the spot price of bullion, and Costco is no exception. This means that you could be paying a higher premium than a traditional bullion dealer.

2. Limited selection & Ability to Purchase

With its short span in the bullion market being relatively new, Costco Canada might offer fewer products compared to the variety available at well-established dealers of precious metals.

This would be a big disadvantage to those collectors or investors who have a preference for specific types of coins or bars, or those interested in a more diversified selection that includes other metals like platinum or palladium. Additionally, Costco has a limitation on the amount of bullion one can purchase, typically 2 per unit. Then, customers must wait 7 days before being able to make their next purchase. This can be counter-productive to investors looking to make a big investment in multiple products.

3. No Buyback Policy

Costco does not offer a buyback policy, as provided by specialized bullion dealers. That means, should the need ever arise later for an investor to decide to liquidate their gold or silver, they would be on their own finding an outlet to do so.

4. Membership Requirement

In the end, if you for any reason want to buy bullion from Costco, the first requirement is that you become a member of the store. However, this imposes a kind of annual fee for membership, meaning an extra cost if you are not a member of Costco for other reasons that would end up making your investment more expensive.

5. Lack of Services and Expertise

Precious metals are a form of specialized investment, and most bullion dealers do offer other related services, such consider secure storage, investment advice, and regular market updates. Costco mainly transacts with customers in a retail business but never the business of tendering investment services. As a result, one is likely to miss expert advice and personalized investment strategies offered by specialized dealers.

6. Limitations of a Physical Store

Of course, bullion availability will vary based on location. This may cause some delays or be a bit annoying if you have to travel from place to place to find exactly what it is you are looking for. 

Conclusion

As tempting as it may be to do so, buying gold and silver from Costco Canada would have to provide for the convenience and trust a brand like Costco can offer. The cons above give further indication of possible disadvantages, as well as extra costs, which may be attached to those purchases. The reality is that most discerning investors — those who value diversity and flexibility, along with first-class expert financial advice — will most likely find better deals on the websites of dedicated bullion dealers. These are very critical aspects that anyone considering making an investment in Gold or Silver.