By Hubert Walker for CoinWeek ….
Since the summer of 2023, Costco has offered its members 24-carat, .9999 fine PAMP Suisse 1oz gold bars, both in-person and online. They added silver bars in January 2024.
The fact that a store like Costco was now selling gold bars generated a bit of buzz when it started, as it presented a new, perhaps cheaper, avenue for gold ownership. A potential investor needed to pay for an annual membership, and as of April 2024, the basic option is 60 USD per year. Costco’s new offering also implied that investing in gold and other precious metals was becoming more culturally “mainstream” in the United States, though, of course, the Washington-based company has 269 stores in other countries.
Naturally, the question for many interested in buying from the warehouse club store is whether they can make any money from the investment. When we first wrote about the topic on September 29, 2023, the spot price of gold was $1,882.50 per ounce. As of today (April 10, 2024), the spot price of one Troy ounce of gold is $2,344.20. If you bought one ounce of gold from Costco in September, then you’ve “made” $461.70–an almost %25 ROI in six-and-a-half months–minus the premium charged by Costco. Pricing is available only to members, but images were shared last year that showed an online price of $1,979.99 for the one-ounce gold bar. This price also included shipping insurance, so the relatively small premium is even smaller when bought in-store.
According to analysts at the banking and financial services company Wells Fargo, Costco has sold an estimated $200 million per month in precious metals, amounting to an increase of about 3% in the company’s general sales. Taking note of the social media interest in Costco’s gold offerings and the resulting online sellout of stock, the analysts also stated that the company’s approximately 2% premium over spot–which can be countered by further discounts and higher-level membership benefits–means that the sales do not generate as much profit for the company as it could were they to charge more for the product.
So, while the future could hold price increases, Costco gold bars are currently a cheaper option for those looking to inflation-proof their investments or diversify their portfolios. As of the time of publication, there is a limit of five bars per membership.
As it was in 2023, Costco was ranked #5 in the National Retail Federation’s 2024 list of the Top 50 Global Retailers.
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Sources
https://coinweek.com/costco-now-offering-gold-bars-finds-them-hard-to-keep-in-stock/
https://nrf.com/research-insights/top-retailers/top-50-global-retailers/top-50-global-retailers-2024
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