December 16, 2023
In a surprising twist, Costco, the renowned retail warehousing giant, has hit a golden jackpot with online shoppers, raking in over $100 million in sales of the precious metal during its first quarter, which concluded on November 26. The revelation was shared by Costco’s CFO, Richard Galanti, during the company’s recent earnings call with analysts.
According to Galanti, the 1-ounce gold bars offered by Costco typically vanish from the virtual shelves within hours of being listed on the company’s website. This phenomenon was first highlighted by Galanti in September, and the trend appears to persist, with the sought-after PAMP Suisse Lady Fortuna Veriscan series reportedly unavailable as of Friday.
Gold enthusiasts on Reddit have noted that these coveted bars were commanding prices slightly above $2,000 as recently as last week. However, customers are met with a limitation of two bars per Costco membership, posing a challenge for those aiming to amass a substantial position in the precious metal.
Despite this limitation, members seem overwhelmingly satisfied with their purchases, as evidenced by the impressive 4.9-star rating on Costco’s website, accompanied by nearly 800 reviews. Nevertheless, a few customers expressed dissatisfaction with the imposition of stiff state sales taxes.
The surge in demand for gold comes amid a 12% increase in spot gold prices throughout the year. JPMorgan’s commodities outlook, published earlier this month, forecasts a breakout rally for gold in 2024, with a projected peak of $2,300 per ounce, fueled by anticipated declines in interest rates.
While JPMorgan suggests a potential retreat in gold prices to $1,900 per ounce in the coming months, it positions this as an opportunity for investors to prepare for a midyear rally. As of Friday morning, the precious metal was trading at $2,036.19 per ounce, benefitting from a weekly gain attributed to a weaker U.S. dollar and lower Treasury yields following the Federal Reserve’s announcement of three expected rate cuts in 2024.
It’s crucial to note that Costco’s gold bars come with a unique caveat—they are non-refundable. As the company continues to strike gold with its online sales strategy, the fascination with precious metals in the digital marketplace appears to be a lucrative venture for the retail giant, leaving both investors and consumers eager to see how this golden streak unfolds in the future.