Amid the unstable economic climate, Costco has diversified its product lineup, giving shoppers the opportunity to purchase gold and platinum bars in addition to groceries and household items. And if the latest estimated sales figures are an accurate predictor, it seems the demand for these precious metals could soar even higher in the coming weeks. But what’s causing shoppers to be so invested in obtaining gold and platinum bullion at this time? Should you be rushing to buy gold and platinum, too?
When Costco started selling gold bullion in June of last year, the big-box warehouse club retailer immediately saw an increase in its revenue. Costco does not disclose specific sales figures or figures for the gold and platinum bars, but Wells Fargo analysts estimated earlier this year that the company could be generating between $100 and $200 million per month since debuting the 24-karat gold bars on its website and at select stores within the country.
In March 2024, Costco added silver coins to its precious metal offerings after stirring the renewed interest in valuable metals with its gold bar months prior. Debuting at around $675 for a 25-count tube of 1-ounce silver coins, the Royal Canadian Mint-produced coins, which featured a likeness of King Charles III on one side, sold out quickly. During an earnings call that same month, former CFO Richard Galanti recognized the sales of Costco’s silver and gold products, saying, “E-commerce sales in Q2 ex-FX increased 18.2%. E-com showed strength in several areas, led by sales of gold and very recently silver.”
Last week, Costco expanded its precious metal inventory once more to include platinum bars. The Swiss-made 1-ounce platinum bars debuted on its website with a $1,089.99 price tag, which is more affordable than the 1-ounce gold bars Costco is selling for $2,699.99 each before tax. Despite the heftier price, gold bullion bars were sold out in around 77% of Costco stores, according to a Bloomberg survey that obtained sales information from 101 locations across 46 states in the first week of October. Meanwhile, estimates for platinum bar sales are still unavailable.
Why people are scrambling to buy bullion right now
There are various reasons why people are stocking up on precious metals lately, with the most obvious being the desire to diversify an investment portfolio. Given today’s uncertain economy, diversification is key to having a bigger buffer when things suddenly go wrong. Securing somewhat less volatile investments is advantageous for investors when stocks, bonds and other assets unexpectedly falter.
Another reason that makes platinum, gold and other precious metals attractive to investors is tangibility. While a healthy portfolio should be largely made up of stocks and bonds, experts recommend having tangible investments that can easily be bought, sold and bought again. Furthermore, in times of geopolitical instability, gold and platinum bars can be easily stored at home or traded for goods when the need arises.
Considering the instability of market economies, seeking investments that maintain their value or even appreciate in time is also a no-brainer for active investors. Bullion can hedge against inflation, acting as a form of protection for wealth through difficult periods. Gold recently hit a record high while platinum prices rose modestly—more than enough reason for investors and collectors to target what Costco is offering.
To buy or not to buy gold and platinum bars from Costco?
With all the hype over Costco’s precious metals inventory, it’s understandable if you’d find yourself jumping on the bandwagon and trying to get your hands on the retailer’s gold and platinum bars. But before you do, there are some things you should know about Costco’s marketing strategies for its bullion products.
For instance, Costco’s pricing is different from traditional precious metal dealers. Gold’s trading value was at $2,642.44 per ounce late last week, while Costco is selling its gold bullion for $2,699.99 pretax, as previously mentioned. Platinum’s market value was approximately $1,000, but Costco was selling it with a slight markup at $1,089.99.
It is also important to note that not everyone can purchase precious metals from Costco. The gold and platinum bars, as well as the silver coins, are only available to customers paying the warehouse giant’s membership fees. Casual customers cannot even view the prices of the yellow, white and silver metals on Costco’s website, as a membership is required to access pricing. Additionally, the number of metal units sold per customer is limited. Customers can buy a maximum of five platinum or gold bars per person with a limit of one transaction per membership.
But if you do decide to buy platinum or gold bars from Costco, you are guaranteed extra rewards as a paying member. The retailer offers 2% cash rewards for purchasing the items using an affiliated Citi credit card. An additional 2% reward is given to executive members paying $130 for the annual membership. A regular annual membership costs $65.
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