Costco has started selling 24-karat gold bars, which have become extremely popular and sold out instantly. In January, the wholesale retailer started selling silver coins.
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According to CBS News, Wells Fargo estimates that Costco moves between $100 million and $200 million worth of gold and silver each month. Equity analyst Edward Kelly claims the rise in sales is due to the members-only store’s use of “aggressive pricing and high level of customer trust.” He noted that the metals are increasing in popularity due to the numerous discussion forums on Reddit and rapid online sales.
Additionally, gold has remained an asset as a defense against inflation and stock market imbalances. Within the past year, gold prices have increased from a record high of $2,160 per ounce in early March to $2,353.15 today. Costco offers two gold bars: the 1-ounce PAMP Suisse Lady Fortuna Veriscan bar, featuring the goddess of fortune with a cornucopia, and a 1-ounce bar from the Rand Refinery of South Africa, which displays an elephant. The retailer also sells 1-ounce Maple Leaf silver coins in 25-coin packs for $650.
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Social media users also reacted to the popular wholesale store’s current gold and silver craze. One user tweeted, “I’m sure this is great for nation states and the ultra wealthy to simply store their wealth, but for average investors it’s a soft honey pot.” Another asked if you could buy the gold bar with a Costco credit card. However, the gold bar is currently retailed at $2,359.99 for members and offers payment plan options on their website.
It has been reported that Costco’s gold bars are sold at a price that is about 2% higher than the market price. This suggests that while the retailer is keen to offer these precious metals, it does not make significant profits from these sales. Kelly stated that “Given the pricing and shipping costs, it appears to be a very low-profit endeavor.”