The wholesale giant saw a huge spike in demand for gold as customers sought a safe haven amid the pandemic
- Costco sold $100 million worth of gold bars in its most recent quarter, CFO Richard Galanti said.
- Sales of the one-ounce bars are limited to two per membership and sell out “within a few hours.”
Costco, the world’s largest warehouse club, sold a staggering $100 million worth of gold bars in the last quarter of 2023, according to its latest earnings report. This was a 10-fold increase from the previous quarter when it sold only $10 million worth of gold.
The company attributed the surge in gold sales to the ongoing COVID-19 pandemic, which has caused economic uncertainty and volatility in the stock market. Many customers turned to gold as a form of investment and protection against inflation and currency devaluation.
Costco has been selling gold bars since 2010, when it partnered with a Swiss company called PAMP, one of the world’s leading gold refiners. The gold bars are available in various sizes, ranging from 1 gram to 1 kilogram, and come with a certificate of authenticity and a serial number. They are also sealed in a tamper-proof package with a hologram.
Costco sells the gold bars at a competitive price, based on the spot price of gold, plus a small markup. The gold bars are displayed in a locked case in the jewelry section of select Costco stores, and can also be ordered online or by phone. Customers can either pick up the gold bars at the store or have them delivered to their home.
Why Costco is a trusted source of gold for its customers
Costco is known for its low prices, high quality, and customer satisfaction. These factors make it a trusted source of gold for its customers, who value its reliability and convenience.
Costco also offers a generous return policy for its gold bars, allowing customers to return them within 90 days of purchase, as long as they are in their original condition and packaging. This gives customers peace of mind and flexibility in case they change their mind or need cash.
Costco also benefits from its loyal membership base, which consists of more than 110 million members worldwide. These members pay an annual fee to access Costco’s exclusive deals and services, and tend to shop more frequently and spend more than non-members. Costco’s members are also more affluent and educated than the average consumer, making them more likely to buy gold as an investment.
What Costco’s gold sales mean for the gold market and the economy
Costco’s gold sales reflect the growing demand for gold as a safe haven asset in times of crisis. Gold is considered a hedge against inflation, currency fluctuations, and geopolitical risks. Gold also has a limited supply and a long history of value, making it a desirable commodity.
According to the World Gold Council, the global demand for gold reached 3,759.6 tonnes in 2023, up 4% from 2022. The demand was driven by investors, who bought 1,773.2 tonnes of gold, up 40% from 2022. The demand was also supported by central banks, who bought 273.5 tonnes of gold, up 8% from 2022.
The high demand for gold also pushed up its price, which reached a record high of $2,067.15 per ounce in August 2023, up 28% from the start of the year. The price of gold remained above $1,800 per ounce for most of the year, despite some fluctuations.
Costco’s gold sales also indicate the impact of the COVID-19 pandemic on the economy and consumer behavior. The pandemic has caused a global recession, with many countries experiencing negative growth, rising unemployment, and falling incomes. The pandemic has also disrupted the supply chains, trade, and travel of many industries, creating uncertainty and instability.
The pandemic has also changed the way consumers shop and spend. Many consumers have shifted to online shopping, delivery services, and contactless payments while avoiding physical stores, restaurants, and entertainment venues. Many consumers have also reduced their discretionary spending, and increased their savings and investments, especially in safe and liquid assets like gold.
Costco’s gold sales show that the company has been able to adapt to the changing market conditions and customer preferences and capitalize on the opportunities created by the pandemic. The company has also been able to leverage its reputation, membership model, and value proposition, to attract and retain customers, and increase its sales and profits.
