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Costco manufactures gold from its own gold.
The retail chain makes between $100 million and $200 million a month on gold bar sales, according to a Wells Fargo stock research note. Last October, the company began selling one-ounce bars made of nearly pure 24-carat gold for about $2,000.
“We view the addition of gold and silver as a prudent move for Costco because it will only increase its value,” the report said. “That being said, when you consider that level of pricing and shipping, you know it’s a very low-margin business at best.”
The wholesaler offers prices around 2% higher than spot prices before offering a 2% cashback benefit to executive members and an additional 2% cashback to Citi cardholders, according to stock analysts. It is said that the price of gold was set appropriately by selling it to members.
The metal generated approximately $100 million in sales from its debut through the end of the fiscal quarter ending Nov. 26.
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Costco also sells silver coins
The warehouse retailer has recently focused on the metals market by also selling silver coins. Coins are sold in his tubes of 25 and are non-refundable.
The 1-ounce Canadian Maple Leaf silver coin was selling for about $680, but sold out online earlier this month.
Coins with a maple leaf on the obverse and the silhouette of Charles III on the reverse are also available and may be available at local warehouses for less. Costco members can purchase a total of 5 tubes of his coins.
The site also found a 2024 1 oz Canadian Maple Leaf 24 Carat Gold Coin priced at $2,219.99.
Gold price today increased by 0.87%
Costco’s success in the metal comes as the spot price of gold has increased by more than 13.70% since the beginning of 2024.
Gold prices were trading at $2,349.44 per troy ounce as of 9 a.m. ET Monday, up 0.87% from Sunday.
The lowest price traded in 24 hours was $2,318.90 per ounce and the highest price was $2,365.35 per ounce.
contribution:Mike Snyder, USA TODAY, Tony Dong and Farran Powell, Blueprint
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