The gold bar craze in Costco brings an economic message

This is all about the issue of trust.

The United States may have abandoned the gold standard as early as 1933, but Costco's consumers have proven that gold is a hot commodity.

Of course, this is an investment, but it also "reflects people's desire for real money," economist and senior fellow at the Independent Institute Judy Shelton told Yahoo Finance on a podcast, "Gold is, to some extent, a substitute for the physical economy. It represents commodities, but also represents the traditional monetary role that you can trust."

The popular Costco gold bars were introduced to warehouse club members last year through 24k 1-ounce gold bars. It is reported that this gold bar generates up to $200 million in monthly sales at Costco. The demand is so great that the retailer has begun to offer platinum bars.

According to Shelton, Costco's gold rush may have personal significance for financially strained consumers. Over the past few years, consumers have become accustomed to seeing inflation rates as high as 9%, while the purchasing power of the dollar has decreased by 20%. This has not inspired confidence among Americans.

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The sudden rise in the popularity of gold may also be related to consumers' overall trust in this precious metal and what it represents. "It is a meaningful unit of calculation. It crosses borders," she said. "It has universal value and is highly recognized."

Currently, the rise in precious metals such as gold is strong. So far this year, the price of gold has risen by 31.72% to $2,750 per ounce. Silver and platinum prices have risen by 41% and 3%, respectively.

Solita Marcelli, Chief Investment Officer of UBS Americas, said there is still room for further growth in gold prices due to the possibility of more rate cuts and worsening geopolitical tensions.

"Despite the rise in gold prices, we believe the hedging function of gold remains attractive. In addition to physical gold, investors can also consider investing through structured strategies, ETFs, or gold mining company stocks. Investors who are not accustomed to the volatility of individual commodities may also consider investing through actively managed strategies, seeking alpha values superior to comparable passive indices," Marcelli wrote in a report to clients.