Costco makes hundreds of millions on 24-karat gold bar sales
Costco may be known for exclusive pricing on everything from high-end spirits to food court hot dogs, but an influx of members are going for gold.
The big box retailer, which started selling 1-ounce nearly pure 24-karat gold bars priced at about $2,000 last fall, has seen a growing amount of consumer interest recently amid inflation and economic uncertainty.
"This is a currency that has been around for thousands of years. It is one thing that holds its value and increases its value over a duration of time," Hitha Herzog, retail analyst and chief research officer at H Squared Research, told ABC News.
In a new equity research note from Wells Fargo, the bank estimated Costco has generated $100 million to $200 million per month in gold bar sales.
"We view the addition of gold/silver as a smart move for Costco, as it only reinforces its value position," the report stated. "That being said, pricing at that level and shipping costs suggests it's a very low-profit business at best."
While the price is not disclosed online to nonmembers, the product typically sells for nearly 2% above the spot price, which as of time of publication was around $2,354 per troy ounce, up more than $350 since 2023.
Personal finance content creator Humphrey Yang told ABC News he purchased one of the bars at Costco for $2,359.
"I think I'll hold on to it as long as I can and maybe I can pass it down to a future generation," he said.
Gold is not a guaranteed investment and has fluctuated before hitting today's record highs.
"The idea of it is that gold holds its worth and that is why people want to have that as a potential investment in their portfolios," Herzog said.
Costco limits the amount of gold that members can purchase to just 5 ounces per customer.
For those looking to make a short term investment, with plans to sell, there is the possibility of a short term capital gains tax between 10% and 30%.
