As gold prices continue to rise, Costco has seen a significant spike in interest for its gold bars, with 77% of its U.S. locations sold out by early October. The recent surge in gold prices, which have reached record levels, has drawn customers to Costco, where they not only benefit from member discounts but also receive cashback rewards. This has made gold an attractive option for individuals looking to protect their wealth against inflation.
According to Bloomberg, spot gold prices have climbed nearly 30% this year compared to last, consistently breaking new records. This trend positions gold as one of the top-performing commodities, outpacing U.S. stocks and bonds. The boost in gold prices can largely be attributed to its status as a safe-haven asset amid geopolitical and economic uncertainties. Following a decrease in interest rates by the Federal Reserve, gold prices surpassed $2,600 per ounce last month, highlighting how non-yielding gold tends to appreciate in low-interest environments.
Costco lists the pre-tax price of a 1-ounce gold bar at $2,689.99, although they are currently out of stock. The low prices compared to traditional precious metal dealers, combined with additional member rewards, have contributed to this unavailability. Bloomberg’s analysis indicates that approximately 77% of Costco stores ran out of gold bars within the first week of October, based on inquiries from 101 locations across 46 states.
There are also indications that financially strained Americans are looking to capitalize on rising gold prices. While many are buying gold bars from Costco, others are selling their gold to exploit price differentials, resulting in an influx of sellers at pawn shops and jewelry stores in New York. Costco’s success in the gold market has drawn new buyers into retail gold sales. The warehouse giant introduced gold bars to its U.S. stores and website back in June of last year. These Swiss-made 24-karat gold bars are packaged to resemble chocolate bars and come in cardboard and plastic wrappers. During a financial earnings call in September, Costco executives shared that their gold product sales exceeded $100 million in a single fiscal quarter, equating to about 51,740 ounces sold at the average price during that period.
Gary Millerchip, Costco’s CFO, highlighted that gold and silver sales remain a vital part of their expanding e-commerce operations. Stefan Gleason, CEO of Money Metals Exchange, one of the leading U.S. precious metal retailers, remarked that Costco has made gold ownership more accessible than ever. Aside from jewelry, it’s believed that less than 2% of Americans own gold and silver; even a slight increase to 5% or 10% could tremendously impact the market.
Miss Li, a Chinese-American customer, expressed her disappointment at not being able to purchase gold bars from Costco despite her repeated attempts. She noted that the enthusiasm for gold within the Chinese community surpasses that of other demographics, particularly as a trend in mainland China encourages daily gold purchases. In her local Costco, which primarily serves the Asian community, gold bars are in scarce supply, prompting her to seek out mainstream locations. Over the past six months, as gold prices have soared, she’s witnessed the cost of bars at Costco increase by at least $800 since her last inquiry.
