Costco is selling a lot of gold.
In a Decemeber 2023 earnings call, the company revealed it had sold $100 million worth of gold bars to shoppers less than two months after starting sales October of that year. That corresponded to a rise in gold pricing that has analysts wondering whether the market share has any direct impact on the the gold market.
May’s earning call shared that gold had boosted revenue for Costco’s e-commerce sales.
“We are excited about the traction that these initiatives are getting with members,” executive vice president Gary Millerchip said. “We’re intentionally creating incremental value for our members by delivering lower prices wherever possible. We believe our strategy of delivering value to drive unit volume and member satisfaction is the winning combination for us.”
Costco’s Gold Bar Collectibles
Those looking at Costco’s gold play have seen that 1 oz. gold bars posted on the company’s website tend to sell out quickly online. Some of Costco’s gold bars may have collectible value as well, with collections and special editions that show the origin of the gold itself.
Costco’s gold bars, like the Swiss Lady Fortuna, are available to Costco members only.
Analysts Weight In On Costco’s Gold Rush
In a note to client’s Wells Fargo analyst Edward Kelly reportedly estimated Costco is generating $200 million a month in gold sales.
For the first time, a gold bar weighing 400 ounces (the size often seen in movies) is worth more than $1 million. The price of gold per troy ounce has risen nearly 30% over the last year, along with other metals like palladium, rhodium, and silver.
While gold tends to rise with interest rates, some are wondering about the price connection to Costco’s entrance, and if that may have moved the needle.
Analysts suggest that many people are getting into gold investing through Costco because they trust the brand. Additionally, $2000 is a good entry point for many retail investors. In other words, those who would not buy a million-dollar bar might be more receptive to a 1 oz. investment. Especially if it only takes a few clicks of a mouse in a familiar retail environment or a trusted vendor.
Costco’s gold rush reflects consumers’ preference for investing in historically popular commodities. Gold is a time-tested value store.
Costco raised its member fees on September 1. But experts doubt this will have a cooling effect on a trend that’s turning heads, as Costco continues to diversify what it offers its VIPs in bulk.
