Costco selling as much as $200M in gold bars per month, Wells Fargo estimates
Costco has struck gold by selling its one-ounce bullion bars — so much so that the big-box retailer is reportedly raking in as much as $200 million a month as the price of the precious metal skyrockets.
Revenue “may now be running” at $100 million to $200 million monthly, Wells Fargo said, according to CNBC — a rapid acceleration from the $100 million sold in one-ounce gold bars in its fiscal first quarter that ended in late 2023.
“Our work suggests there has been significant interest given COST’s aggressive pricing and high level of customer trust,” Edward Kelly, an equity analyst at Wells Fargo, said in a note to clients Tuesday, per CNBC.
Though Costco doesn’t disclose its price for the nearly pure 24-karat gold bars to nonmembers, it’s estimated that the wholesaler tacks on a 2% charge above the spot price, which as of Wednesday morning was around $2,340 an ounce. That would put the price at Costco at nearly $2,400.
The price of gold has soared 13% this year as investors seek a safe haven from inflation that has remained stubbornly high despite the Federal Reserve raising interest rates to a 22-year high.
On Wednesday, the Consumer Price Index came in at a hotter-than-expected 3.5% for March — well above the Fed’s 2% target — to cast doubt on whether the central bankers will begin cutting interest rates as early as June.
Costco’s gold bars have become so sought-after that they sell out in seconds — and there are Reddit threads dedicated to scoring one.
In the discussion called “r/Gold,” Reddit users announce when Costco gets its gold bars back in stock.
The company has raised the limit of how many gold bars its shoppers can purchase to five from two.
It appears the pattern in which new stock comes in remains unclear, though one said to check the website “Wednesdays and Fridays” for new gold inventory.
The Washington-based chain denotes that its gold bars — which come in with a serial number and proof of authenticity — includes insured UPS two-to-three-day shipping.
One Redditer advised Costco members to use their Costco Executive Member card to receive 2% cash back to purchase the gold bars, as they’re eligible for the award.
Customers who use their Citigroup credit cards are eligible to receive another 2% cash back.
The gold’s pricing, cash-back sales and shipping costs suggest “it’s a very low profit business at best,” Wells Fargo’s Kelly wrote in his Tuesday note.
Another Reddit user attributed the craze to Costco making an investment in gold attainable.
“It’s hard — just about impossible — for a regular person to buy reputable gold without either paying a significant markup over the value, or not ever holding the gold in-hand. Costco solved that: real known-purity gold, in-hand, almost no markup,” the user wrote.
Representatives for Costco did not immediately respond to The Post’s request for comment.
