Costco Is Selling a Surprising Amount of Gold

Analyst estimates up to $200M per month in sales of gold bars
By John Johnson,  Newser Staff
Posted Apr 11, 2024 9:19 AM CDT
Costco Is Selling a Surprising Amount of Gold
A Costco webpage featuring a one-ounce gold bar and a Costco membership card are shown in this photo.   (AP Photo/Richard Drew)

Costco is turning into a serious gold merchant. A Wells Fargo analyst estimates the chain is pulling in $100 million to $200 million per month in sales of one-ounce gold bars, reports USA Today. Costco began selling the bars last year, and they quickly became hot-ticket items. Given that Costco reported total gold sales of $100 million for the entire quarter ending in November, the new analysis suggests the bars are even more popular as people look for a hedge against inflation.

  • Price: Costco doesn't disclose details, but the bars of 24-karat gold are believed to sell at about 2% over spot prices, meaning they cost about $2,400 at the moment, per CNBC. Gold is up more than 13% this year.

  • Little profit: Costco, however, is not getting rich off the sales. The 2% premium is low for starters, and the chain also offers 2% cash back for certain members and another 2% if a Citi credit card is used, notes Quartz. "Pricing at that level and shipping costs suggests it's a very low profit business at best," the analyst wrote.
  • Be wary: Financial adviser Suze Orman understands people's interest in investing in gold, but she tells CNN they might want to think twice before buying actual bars. Will they be insured? Where will they be stored? Then comes the logistics of eventually selling them. She notes there are other ways to invest in the metal without actually touching the metal.
(More Costco stories.)

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