Gold has a reputation for acting as an inflation hedge, where investors seek out safer assets during times of economic uncertainty.
On top of home decor and bulk-sized bags of candy, Canadians are now rushing to Costco to add gold bars to their (online) shopping carts.
Last month, Costco Canada began selling one-ounce, 24-karat gold bars — priced at $2,679.99 a piece — online. According to Costco chief financial officer Richard Galanti, the bullions sell out within hours whenever they’re added to the retailer’s website. It’s one of the reasons shoppers are only permitted to buy two at a time.
But financial experts warn that unless you’re in a doomsday scenario, other investments might offer better returns, as predicting the metal’s returns can be tricky. Gold has a reputation for acting as an inflation hedge, where investors seek out safer assets during times of economic uncertainty.
That uptick in demand can drive up its price. But as Dan Hallett, principal at Toronto-based HighView Financial Group, notes, the price of the yellow metal has “been completely free-floating.” “If you look at a bunch of different historical chunks of time, you’ll find that sometimes it does hedge inflation and sometimes it doesn’t, so it’s not that reliable,” he says.
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