Costco's stock of one-ounce gold bars became as elusive as the latest tech gadget, with about 77% of stores surveyed by Bloomberg reporting that they sold out in the first week of October. Amidst the soaring gold prices, which hit a record high of $2,686 per ounce on Sept. 26 according to the American Precious Metals Exchange (APMEX), Costco found its shelves emptied rapidly. Enthusiastic buyers have continued to snap up the precious metal at $2,699.99 per bar, showing the staggering appeal even as it represents a significant markup from last year's price tag of under $2,000, as reported by KXAN.
The interest in gold at Costco isn't just to solely purchase an investment; it's become an integral part of a diverse financial strategy for many. "It's a great experience overall," Sourav Sethia, an analytics engineer from New Jersey, told KXAN. Sethia, previously a buyer of the bars, benefits from alerts from Costco whenever new stock arrives, an incentive to quickly capitalize on fluctuating prices.
Aside from the obvious benefits of investing in a historically stable asset, Costco members are being especially wooed with additional perks. They can earn up to 2% back using the Costco Citi card, another 2% in rewards for executive members, and often a lower pricing premium than what's usually charged by precious metal retailers. In a display of confidence and consumer loyalty blending seamlessly, "It seemed like a too-good-to-be-true deal," Josh Young, a money manager from Houston, admitted to InvestmentNews, after purchasing a gold bar and coin from Costco in the past year as a hedge against financial risks.
Backing up the retail giant's foray into precious metals are the steady sales figures. During a September 2023 earnings call, Costco execs noted that the company sold over $100 million in gold bars in its fiscal first quarter. The buzz around these transactions has been undoubtedly significant, with online communities such as Reddit and YouTube flourishing with testimonials and showcase videos from those who've made the purchase.
