Costco, the wholesale retail giant known for selling everything from toilet paper to electronics, has added a new item to its inventory: gold bars. The company is offering 1-ounce gold bars from two reputable sources: PAMP Suisse and Rand Refinery. The bars are selling out fast as customers seek a safe haven amid economic uncertainty and inflation fears.
What are the gold bars and how much do they cost?
The gold bars are authentic 1-ounce bars that come with certificates of authenticity and serial numbers. The PAMP Suisse bars feature a design of Lady Fortuna, the goddess of fortune, with a cornucopia. The Rand Refinery bars have an elephant motif. Both bars are about half an inch long and can be purchased online only by Costco members.
The price of the gold bars varies depending on the spot price of gold, which fluctuates daily. As of Thursday morning, the PAMP Suisse bars were selling for about $1,980 and the Rand Refinery bars for about $1,950, according to Yahoo Finance. The spot price of gold was $1,875.56 an ounce on Thursday, according to FactSet.
Why are the gold bars so popular?
Costco’s Chief Financial Officer Richard Galanti said in an investor call this week that the gold bars were in high demand and were selling out within a few hours of being listed on the website. He also said that the company was limiting the purchases to two bars per member.
Gold has long been viewed by investors as a hedge against inflation and a source of financial stability when stock and bond markets are volatile. Over the past five years, the price of gold has jumped 57%, compared with a 47% rise in the broad-based S&P 500 stock index during the same period.
Some Costco customers also praised the company’s reputation and the cash-back benefits of using the Costco credit card and executive membership. One buyer wrote in a 5-star review: “Costco’s solid gold reputation made it an easy and secure purchase. I’m not sure I would trust just any dealer, tbh.”
How does Costco compare to other gold dealers?
Costco is not the first retailer to sell gold bars, as other online platforms such as Amazon and eBay also offer them. However, Costco may have an edge over its competitors due to its lower prices, higher quality, and customer loyalty.
Jonathan Rose, co-founder of Genesis Gold Group, a gold investment firm, said that Costco had done its market research and that selling gold bars was a clever way to get publicity and appeal to a certain sector of its clientele. He noted that the company had also increased its offerings of dried foods and other survivalist goods at a time when worries about the future were running high.
“There is definitely a crossover of people living off the land, being self-sufficient, believing in your own currency. That’s the appeal to gold as a safe haven as people lose faith in the U.S. dollar,” he said.
