Key information
- Costco could sell up to $200 million (€182 million)) gold per month.
- 77 percent of Costco locations selling bullion were sold out during the first week of October.
- The price of gold has increased by around 41 percent over the past year, reaching a record price of $2,686 (€2,444).) per ounce on September 26.
The rise of precious metals at Costco
A recent Bloomberg survey found that about 77 percent of Costco locations selling bullion were sold out during the first week of October. The survey, which included 101 stores across 46 states that recently restocked their gold inventories, suggests strong demand for the precious metal despite its record prices in recent months.
The price of gold has increased by about 41 percent over the past year, from about $1,864 (1,696 euros) per ounce to $2,640 (2,444 euros) per ounce. APMEX data indicates that gold reached a record price of $2,686 per ounce on September 26. Costco began selling one-ounce gold bars late last year, both in its stores and online, exclusively to its members.
Costco Gold Sales Reach New Highs
Wells Fargo estimated in April that Costco was potentially selling up to $200 million in gold per month. Analyst Edward Kelly attributed the result to Costco’s competitive pricing and customer confidence. He noted an increased online presence, with rapid sales and increased mentions on platforms such as Reddit.
Gary Millerchip, Costco’s chief financial officer, acknowledged that gold and silver had become an important part of the company’s growth strategy, emphasizing their ability to offer unique and valuable products. He highlighted Costco’s commitment to providing its members with diverse options.
Expansion to platinum
Following the success of gold and silver sales, Costco recently introduced platinum bars and coins. The retail giant has listed Canadian platinum Maple Leaf coins and Swiss-made one-ounce platinum bars on its website, priced at $1,089.99 each. As with gold and silver, Costco has purchase limits for platinum products.
Costco’s expansion into precious metals coincides with recent changes in member dues and spending habits. In July, the company announced a $5 (4.55 euro) increase in its annual membership fee for gold star and executive members.
Market Conditions and Consumer Spending
During a conference call following the results release on September 26, Chief Financial Officer Gary Millerchip noted that consumers are increasingly selective in their spending habits. This suggests that while demand for precious metals remains strong, Costco’s success will depend on its ability to adapt to changing consumer preferences and market conditions.
Win gold bars at Carrefour
In Belgium it is not possible to buy gold in local stores, but some supermarkets are currently going further by offering unique savings promotions. For example, supermarket chain Carrefour is currently running a promotional campaign offering customers the chance to win five gold bars. A winner recently took home the first gold bar, worth around 18,225 euros.
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