Editor’s note: This is an updated version of a story originally published on September 22, 2023.
new York
CNN
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On Tuesday, Senator Bob Menendez was found guilty on 16 counts, including bribery, extortion, wire fraud, obstruction of justice and acting as a foreign agent.
A key piece of evidence prosecutors presented to jurors during the nearly seven-week trial was the gold bars the FBI seized from the senator’s home, which he and his wife allegedly received in exchange for their work on behalf of foreign government officials and businessmen. Menendez maintains his innocence and plans to appeal the verdict, he told reporters outside the Manhattan courtroom on Tuesday.
The discovery that Menendez owned a treasure trove of gold bars shocked many people. Who even owns physical gold bars these days?
Actually, a lot of people.
Demand for gold had already risen as people looked for ways to hedge their investments against inflation. Because gold is a physical asset with a limited supply, it offers that stability.
Then a series of bank failures, starting with the failure of Silicon Valley Bank last year, added to the momentum.
For many people, this was “a wake-up call,” said Jonathan Rose, CEO of Genesis Gold Group, a precious metals company in Beverly Hills, California. “There was a feeling of helplessness,” he said, adding that he could attest to this because he had invested money in Western Alliance, which came under considerable pressure after SVB’s collapse.
“A lot of people were scared and thought, ‘Maybe my money isn’t as safe in the banking system as I thought.'” As a result, interest in owning gold skyrocketed as people sought tangible stores of value that “can’t evaporate,” Rose told CNN. And now even Costco sells gold bars.
Ironically, gold prices hit a record high on Tuesday, the day Menendez was sentenced, as US investors regained confidence in the prospect of interest rate cuts this year, which also helped the Dow Jones and S&P 500 to new records.
The two kilograms and eleven ounces of gold bars owned by Menendez and his wife would have been worth more than $185,000 on Tuesday, according to data from Goldprice.org.
Even though you can invest in gold and other precious metals without physically owning them, people prefer to “hold the currency in their hands,” Rose says.
Because if you invest in a gold ETF, for example, “it’s still tied to the market,” he said. That means if the market crashes, you’ll be affected and suffer some losses as a result.
Many of his customers have buried the gold he sold them in the ground, he said. One even kept it in an empty paint can in his garage. Other people who prefer to keep their gold under their own roof store it in a gun safe or floor safe, he added.
For added security, you could take out insurance or keep the money in a bank safe deposit box, but most of his clients choose not to, he says.
However, individuals who wish to invest in IRS-approved physical gold in their tax-advantaged investment accounts are required by law to keep it in a bank or non-bank trust.
