Costco’s Latest Hit with Online Shoppers: Gold
Retail giant Costco has discovered a new hit with online shoppers—gold. Costco’s Chief Financial Officer, Richard Galanti, announced that the company sold more than $100 million of gold in its fiscal first quarter.
The 1-ounce gold bars are in high demand, typically selling out within a few hours after being loaded to Costco’s website. Despite the high price of $2,069.99 per ounce, customers are limited to purchasing only two bars per membership.
While the gold bars have received a 4.9-star rating on Costco’s website, some customers have expressed dissatisfaction with the stiff state sales taxes. This surge in gold sales is occurring against the backdrop of a 12% increase in spot gold prices this year, and JPMorgan’s forecast of a breakout rally for gold in 2024, with a peak price of $2,300 an ounce.
Gold’s current upward trend is supported by a weakened U.S. dollar and declining Treasury yields, with the Federal Reserve signaling three rate cuts in 2024. The investment bank forecasts that gold could retreat to $1,900 an ounce in the coming months, setting the stage for a midyear rally in 2024.
The one caveat of purchasing Costco’s gold bars is that they are nonrefundable. This significant detail should be carefully considered by potential buyers.
Additional Insight:
The surge in gold sales at Costco reflects a growing trend of retail investors turning to precious metals as an investment option. Amid economic uncertainty and the potential for future inflation, gold is seen as a safe-haven asset that can provide a hedge against financial market volatility. The limited availability of gold bars at Costco and their popularity among members also highlight the increasing interest in physical gold ownership as a way to diversify investment portfolios.
