For Costco, yellow metal sales that started last year have become a cash cow for the big-box store. Gold has become money.
Sales of bullion have significantly increased since it arrived at the warehouse club in the summer of 2023. Wells Fargo analysts estimate that revenue is now reaching an impressive $100 million to $200 million per month.
The bank's stock analyst, Edward Kelly, wrote to clients on Tuesday, saying that their research shows a lot of interest in COST due to its low prices and strong consumer trust. The internet has seen a rapid increase in product sell-outs, along with a higher number of Reddit postings. Additionally, COST has also experienced strong monthly e-commerce sales. All these factors indicate a significant increase in momentum since the launch.
Kelly's estimated accuracy is significant for a product that debuted in August of last year and generated approximately $100 million in sales during Costco's first fiscal quarter, which ended in late November 2023.
One-ounce bars consisting of almost pure 24-karat gold are available at Costco. The product usually sells for about 2% more than the current price, which on Tuesday morning was around $2,357 per ounce, but the price is not posted online for nonmembers. Based on that, the cost at Costco would be a little higher than $2,400.
This year, gold has been extremely strong, with spot prices climbing over 13% in 2024 due to heightened investor concerns about the declining U.S. economic position and a protracted wave of inflation that began in 2022. The government's debt load has topped $34.6 trillion, and this year it is expected to run a $2 trillion deficit.
