Costco appears to have found a revenue mine with sales of gold bars, as a survey found that some warehouses are unable to keep them on shelves.
Bloomberg found that 77% of the 101 stores it surveyed in the first week of October had sold out of the bars, the financial news outlet reported Monday.
In its fourth quarter earnings call, Costco CEO Gary Millerchip said that the metal “was a meaningful tailwind to e-commerce comps.” An April Wells Fargo report stated that the bank’s analysts believe that the warehouse retail giant is selling between $100 million to $200 million in gold per month.
USA TODAY previously estimated that Costco sells between 50,000 and 100,000 ounces of gold per month, using the Wells Fargo analysis.
Gold remains high as inflation cools
The metal, historically a hedge against inflation, has remained near record highs after seeing a 30% increase in its spot price this year even as inflation has cooled.
Costco’s success comes as other areas of the gold market have weakened, notably the American Eagle gold coins − a proxy for retail gold buying − fell 64% between January and September of 2023, according to US Mint Data.
Zachary Scott, the general manager of Wilshire Coin in Santa Monica, Calif. Scott told USA TODAY in April that he is seeing customers who are “less than typical” brought in after seeing gold being sold by “a trusted company.”
“It’s bringing in new buyers and interest, though not in massive amounts, who have seen the articles around Costco selling gold,” Scott said.
Platinum onramp follows gold success
The success of Costco’s forays into the precious metals market led the company to introduce platinum to the lineup.
The bar offered by Costco retails for $1,089.99 and is sold exclusively online.
The company describes the new platinum bars as 999.5 pure platinum made in Switzerland. The refiner has also earned the Good Delivery accreditation from the London Bullion Market Association, is an international trade association linked with the precious metals industry, the company said.
Contributing: Fernando Cervantes Jr.
### Costco’s Impressive Gold Sales
Costco’s venture into selling gold bars has proven incredibly successful, with a high demand resulting in many stores selling out of these bars. The company’s earnings have seen a significant boost from this initiative, reflecting the popularity of investing in precious metals during uncertain market conditions.
### Market Response to Gold vs. Other Precious Metals
While gold remains a preferred choice for many seeking to hedge against inflation, other areas of the gold market, like American Eagle gold coins, have experienced a decrease in sales. This shift highlights Costco’s strategic move to tap into the demand for physical gold investments and cater to a new segment of buyers.
### Diversification with Platinum Bars
Following the success of its gold sales, Costco has introduced platinum bars to its lineup, expanding its offerings in the precious metals market. By providing exclusive online sales of these platinum bars, Costco is capitalizing on the growing interest in alternative investment options beyond traditional assets.
### Trust in Established Retailers
The presence of trusted retailers like Costco in the precious metals market is attracting new buyers who value security and legitimacy in their investments. This trend showcases the importance of reputable sellers in encouraging broader participation in the precious metals market, adding depth to the overall investment landscape.
