This week, the price of gold reached an unparalleled high, causing the cost of a standard gold bar to surpass $1 million for the first time in history.

A conventional gold bar is typically defined as weighing 400 Troy ounces, or 27.5 pounds, as per the U.S. Gold Bureau. As of Friday afternoon, the price for such a bar was slightly above $1.3 million, with 1 ounce priced at over $2,500.

The record prices reported this week showcase a significant surge that has occurred over recent years and even in recent months. From the start of the year until August 22, 2024, gold’s price climbed from $2,066.32 per Troy ounce to $2,500.72, equating to a 21.02% increase. By Tuesday’s close, spot gold was priced at $2,514, setting a new historical record.

Even Costco entered the modern gold rush that kicked off in late 2023, beginning to sell 1 oz gold bars alongside other precious metals and coins.

Here are the key points about these unprecedented prices.

What is the current gold price?

The current market price for spot gold is $2,515.83 as of early Friday afternoon.

The price is generally measured in Troy ounces, a unit used for precious metals that weighs more than a standard ounce, according to the American Precious Metals Exchange (APMEX). One Troy ounce is equivalent to 1.097 regular ounces or 31.10 grams.

This measurement first appeared in the Middle Ages and has its origins in Troyes, France.

<p”Spot” gold refers to the current market price at which gold can be immediately bought or sold, as mentioned by APMEX. This price reflects the market worth of gold at this moment and does not take future or long-term prices into account.

What is causing the rise in gold prices and how is it determined?

The value of gold has significantly increased over the past five years, rising from approximately $1,200 per ounce in 2019.

While research suggests that gold does not show a strong connection to inflation, Jonathan Rose, co-founder of Genesis Gold Group, mentioned to CNBC that many individuals are purchasing more gold to secure a reliable asset amid rising inflation, a challenging housing market, and growing skepticism toward banks and other financial institutions.

Rose added, “The market outlook is not promising, and people are seeking a tangible asset that offers security. Gold and silver fulfill that need.”

People are drawn to actual gold as a means of achieving a level of independence they think will endure in an unstable cash market.

Is your Costco gold bar really worth $1 million?

Costco gained attention when it began selling gold bars in October 2023, achieving over $100 million in gold sales in the first quarter of fiscal 2024.

The gold bars sold by Costco weigh 1 Troy ounce, a significant contrast to the 400 Troy ounce bars currently valued at $1 million.

As of early Friday afternoon, one Troy ounce of gold was priced at $2,515.83. If you were to hold approximately 400 Costco bars, your total worth could be around $1,006,332.

However, given that Costco limits purchases to two bars per customer, it’s pretty improbable that this investment would turn you into a millionaire.