Tags: costco | gold | silver

Costco Selling $200M of Gold Each Month

Costco Selling $200M of Gold Each Month
A Costco webpage featuring a one-ounce Gold Bar PAMP Suisse Lady Fortuna Veriscan, and a Costco membership card. Costco CFO Richard Galanti said the gold bars, which are sold exclusively online, are "typically gone within a few hours" — adding that there's a two-bar limit per member. (Richard Drew/AP)

By    |   Friday, 12 April 2024 09:39 AM EDT

As the demand for safe-haven gold continues to build momentum, Costco is now selling as much as $200 million worth of one-ounce 24-karat gold bars each month, according to a report from Wells Fargo.

The big-box warehouse’s sales of 99.9% pure silver coins are also booming.

Gold prices scaled an all-time record peak of $2,400 Friday and were poised to post a fourth straight weekly gain as geopolitical risks and economic concerns surrounding China attracted robust demand.

While the U.S. economic outlook has improved, jobs are plentiful, and inflation has slowed, inflation remains higher than the Federal Reserve’s 2% target, said Sadiq S. Adatia, chief investment officer at BMO Global Asset Management.

Geopolitical unrest in Ukraine and the Middle East could also be driving investors’ interest, Adatia added. Gold is a popular investment during times of economic turmoil, he noted.

Consumers also trust Costco and like owning tangible bars and coins, the CIO said.

“They make it convenient,” Adatia said of Costco. “People can physically go in and pick it up, and that’s it.”

While a $200 million boost to bottom-line sales is probably only a 1% lift for Costco’s profits, the sale of the precious metals, available only to Costco members, is attracting new shoppers, which is why Wells Fargo decided to look into the sales, said Edward Kelly, managing director of equity research at Wells Fargo.

“The reason we looked at this is that it’s becoming a larger contributor to sales for them,” Kelly said. “It’s new business, and they didn’t have that business last year.”

Costco began selling gold bars last September, and they have become popular among many demographic groups, with Gen Zers allocating 17% of their portfolio to gold, according to Wells Fargo. Boomers and Gen Xers allocate 10% of their investments to gold.

Available in store and online, Costco’s gold and silver sell out within hours.

The Commodity Futures Trade Commission cautioned investors to exercise care when investing in gold and other precious metals. “Like other commodities, precious metal prices rise as demand goes up, so when economic anxiety or instability is high, the people who typically profit from precious metals are the sellers,” CFTC said in a statement.

Larry Tentarelli, chief technology strategist for Blue Chip Daily Trend Report, recommends average investors allocate no more than 3% of 5% of their portfolio to gold.

© 2024 Newsmax Finance. All rights reserved.


StreetTalk
As the demand for safe-haven gold continues to build momentum, Costco is now selling as much as $200 million worth of one-ounce 24-karat gold bars each month, according to a report from Wells Fargo.
costco, gold, silver
417
2024-39-12
Friday, 12 April 2024 09:39 AM
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