Since the wholesale retailer giant began selling gold bars to its private members a few months ago, they have pulled in massive profits and shifted the influence of the precious commodity.
Costco, the commercial distributor known for selling food and home amenities in bulk, has sold over $100 million of the valuable metal in the relatively short span of their last quarter, which lasted from September to November 26th, as reported by the company’s chief financial officer Richard Galanti.
In response to the demand for gold rising globally in the recently unstable climate of the economy, Costco began selling 1 oz (28g) 24K gold bars exclusively online to customers with full memberships. They currently have over 72 million paid members who are eligible to buy this metal after its release on the website.
AP reported that Galanti claimed that the bars usually sell out “within a few hours” in a company earnings call in September. Shoppers are limited to purchasing two bars maximum for their membership as a means of preventing them building too large a collection or reselling the gold. The bars are also nonrefundable after purchase.
Although the exclusive nature of this recurring promotion or venture makes it difficult to track the exact amount of money being transferred, CNBC reported that the price of an ounce was $2,0699.99 on Friday, which was an increase from the previous drop’s pricing of $2,020.58.
The members buying these gold bars seem to be satisfied with their purchases for the most part, as the 24K bars have a 4.8/5 rating on the website and nearly 800 reviews. Yet, some customers did leave complaints about the hefty sales tax.
In possible correlation with this phenomenon, spot gold prices have jumped approximately 12% this past year. According to their bank’s commodities outlook published earlier this month, J.P. Morgan predicted that the valuable metal will have a breakout in 2024 with a peak of $2,300 an ounce since interest rates are suspected to fall. They also reported that gold’s prices could sink back to $1,900 an ounce in the following couple of months, but this will set up investors to prepare for the alleged midyear rally in 2024 that will raise the gold rates.
Since the U.S. dollar has weakened and Treasury yields regressed in the aftermath of the Federal Reserve signaling that three rare cuts are projected in 2024, gold is expected to gain currency week by week.
