Costco Is Now Selling a Shocking Amount of Gold Each Month, Report Says
Costco bet on gold in a big way last summer by selling one ounce, pure 24-karat bars, and now the company is reaping in the profits. Wells Fargo analysts reportedly told clients this week that the big box retailer is earning between $100 million and $200 million in gold sales per month alone.
When gold bullion first became available on Costco's website last August the product was an immediate hit, often selling out within hours of restocking. According to CNBC, gold sales generated about $100 million in sales in Costco’s fiscal quarter ending November 2023, which suggests that it's rapidly becoming an extremely lucrative part of the business.
“Our work suggests there has been significant interest given COST’s aggressive pricing and high level of customer trust,” said Wells Fargo equity analyst Edward Kelly in a note to clients on Tuesday. "The accelerating frequency of Reddit posts, quick on-line sell-outs of product, and COST’s robust monthly eComm sales suggests a sharp uptick in momentum since the launch."
The gold bars initially cost $1979.99 per one ounce bar, but after the price of gold spiked 13 percent in 2024, it's now estimated that they cost around $2,400 each. Although Costco does not disclose prices on its website to non-members, the current price of gold is around $2,357 per ounce and it's estimated that Costco marks up about 2 percent from the spot price.
Costco has also raised limits for the maximum amount of bars that can be purchased at a time from two bars per customer when the product debuted to now five bars per customer.
It makes sense that the fiscal trend would gravitate towards gold when there is currently looming fiscal uncertainty in the United States fueled by geopolitical unrest in the Middle East and Eastern Europe. Unlike stocks or other types of investments, investors typically flock to gold as a traditionally "safe" investment that holds its value during turbulent economic times.
