Copyright © BusinessAMBE 2023

A very striking action by the American supermarket chain Costco seems to be turning into a gold mine, literally. Indeed, Costco has been selling gold bars since August and, in the meantime, this would account for sales of between 100 and 200 million dollars a month.

Context: Costco, one of the largest retail chains in the world, announced a remarkable new product just over six months ago. Namely, since September 2023, the retail chain has been selling 1-ounce gold bars, or just over 28 grams.

  • The price of those gold bars is visible only to customers with a Costco membership card. However, it would always be about 2 percent above the official gold price. So currently, such a block of gold costs around $2,400 (2,250 euros). Reports CNBC.
  • Since the beginning of this year, the store has also started selling silver coins in packages of 20 or 25 pieces.

Rising gold price

With gold prices breaking record after record, the success of gold bars at Costco has also increased. The retail chain increased its original limit of two bars per customer to five bars. Thanks in part to posts on the Reddit forum, the hype surrounding the sale of gold at Costco is said to have reached unprecedented levels.

  • Wells Fargo analysts estimate that gold bar sales at Costco currently account for $100 million to even $200 million (€95 million to €190 million) a month. "Our research suggests there is significant interest given Costco's aggressive pricing and high level of customer confidence," Edward Kelly, an equity analyst at the bank, said of this in a note to clients.
  • Official Costco figures show that gold sales from August to November 2023 only accounted for $100 million in sales. So these new figures point to skyrocketing interest.

But: Wells Fargo does point out that the profit Costco is left with from the sale of gold bars is very limited. Thus, it sells the bars barely 2 percent above the market price. Special members also get another 2 percent cashback, and those who make their purchases with a Citi card, the chain's credit card, get an additional 2 percent cashback on top of that. Possibly the sale of gold bars did provide my customers, and thus more sales of other products.

© The Content Exchange, source News