Even as the price of gold bullion stays high, consumers are continuing their gold rush at Costco warehouses nationwide.
The national membership-only warehouse chain started offering gold in stores and online in 2023, and saw immediate high demand for the precious metal.
“When we load them on the site, they’re typically gone within a few hours and we limit two per member,” Richard Galanti, who was Costco’s chief financial officer at the time, said on the company’s earnings call for the fourth quarter of fiscal 2023.
A year later, and demand for bullion has remained strong at Costco. The sales limit is now up to five per customer, according to CNBC.
A Bloomberg survey of 101 Costco stores across 46 U.S. states found that about 77% of respondent stores ran out of gold in the first week of October, even after receiving fresh stock shortly before then.
On the earnings call for the fourth quarter of fiscal 2024, current Costco Chief Financial Officer Gary Millerchip noted that gold, among other goods, had seen a double-digit sales increase during the quarter, though CEO Ron Vachris said there were no current plans to sell store-brand Kirkland Signature gold bars.
A Wells Fargo analysis note to clients in April estimated that the national retailer makes anywhere from $100 million to $200 million a month on gold, according to CNBC.
The price of spot gold is up above $2,600 according to Bloomberg, and buying at Costco offers consumers some extra benefits, including 2% cash rewards if a customer uses an affiliated Citi card and another 2% reward on purchases if the customer is an executive Costco member.
The premium Costco charges on top of the spot gold market rate is also only 1.6%, lower than traditional metal retailers, according to Bloomberg. Consumers like gold as a hedge against inflation.
“It seemed like a too-good-to-be-true deal … It’s physical and gold does have a long history of being a store of value even though there’s no cash flow from it. It’s a good personal diversifier,” customer Josh Young told Bloomberg.
In addition to gold, Costco has also started offering other precious metals including platinum, selling for $1089.99 a pop.
• Brad Matthews can be reached at bmatthews@washingtontimes.com.