Costco Wholesale Corp. is experiencing a gold rush, with bullion bars selling out rapidly across its U.S. stores despite record-high prices, according to a recent Bloomberg survey.
The warehouse retailer began offering 1-ounce 24-karat gold bars in June 2023, both in stores and online. These Swiss-made bars, about the size of a small chocolate bar, have become a hot commodity among Costco members.
According to the Bloomberg survey, approximately 77 percent of Costco outlets surveyed were sold out in early October, based on calls to 101 stores in 46 states, despite recent restocking efforts. This high demand comes as spot gold prices have surged nearly 30 percent this year, reaching unprecedented levels above $2,600 an ounce in September.
Costco’s venture into precious metals has proven lucrative. During a December 2023 earnings call, executives reported over $100 million in gold bar sales for the fiscal first quarter.
In a Sept. 2023 fourth-quarter earnings call, they said the bars would sell out within hours.
“I’ve gotten a couple of calls that people have seen online that we’ve been selling one-ounce gold bars, yes, but when we load them on the site, they’re typically gone within a few hours,” Costco Chief Financial Officer Richard Galanti told analysts, according to a transcript of the call.
He also revealed customers are limited to two gold bars each.
The retailer’s success in gold sales contrasts with broader trends in the United States, where American Eagle gold coin sales, a proxy for retail buying, have dropped 64 percent in the first nine months of 2024 compared to the previous year, according to U.S. Mint data.
Costco’s appeal to gold buyers stems from competitive pricing and additional perks for members. The company offers gold at a lower premium than many traditional precious metals dealers, with potential cash-back rewards for certain memberships and credit card use.
While Costco doesn’t disclose detailed sales figures, Chief Financial Officer Gary Millerchip noted that gold and silver sales continue to be a significant contributor to e-commerce growth, according to an email to Bloomberg.
New Demographic
Industry experts suggest that Costco’s gold offerings are introducing a new demographic to precious metal investing. Nicky Shiels, head of metals strategy at MKS PAMP SA, described Costco as the “one bright spot” in the consumer gold-buying market in a Bloomberg interview.
Some Costco shoppers have taken to the internet about their gold purchases. In September 2023, TikTok user midlifecrisisgirl shared with her 40,000 followers that she purchased two gold bars with elephant engravings from Costco for about $1,950 each.
In an April 2023 post, she said Costco gold bars were her “best impulse buy,” which she discovered after looking for gold jewelry on the retailer’s website.
According to Costco’s website, the bars are now listed for $2,699 and are still out of stock.