Gold sales have become a major revenue generator for Costco, and the trend is only growing. With inflation concerns and geopolitical tensions, many investors are turning to gold as a safe haven. Here’s what you need to know about buying gold bars from Costco in 2024.
How much is Costco selling gold bars for?
Gold has proved to be a lucrative market for Costco, where sales of the precious metal have surged since their introduction last year. Analysts at Wells Fargo estimate gold bar sales may generate between $100 million to $200 million in monthly revenue. This rapid growth is evident in online sell-outs and social media discussions.
While Costco doesn’t disclose gold prices to non-members, estimates suggest the 1-ounce, nearly pure 24-karat gold bars sell for around 2% above the spot price. As of this writing, that would put the price at just over $2,400.
The surge in gold prices in 2024, rising more than 13%, is fueled by persistent inflation and fears surrounding the US fiscal situation. Despite the clear benefit to Costco’s top-line revenue, analysts note that the low premium on gold bars and added cashback offers result in minimal bottom-line profit.
As an investment, however, gold remains attractive. It’s a traditional inflation hedge and a safe haven asset amidst geopolitical uncertainty. Central banks, particularly in Asia, are large gold buyers, signaling potential for further price increases.
How to buy gold bars from Costco in 2024
Costco gold bars are sold exclusively online, and a Costco membership is required ($60-$120 annually). High demand and limited stock mean they sell out quickly. To purchase:
- Check the Costco website frequently for restocks.
- Purchase up to the current limit (five bars per customer).
- Gold bars will ship directly to your address, requiring a signature upon delivery.
- Important Note: Costco gold bars are non-refundable.
How much is Costco selling gold bars for?
Costco sells 1-ounce PAMP Suisse Lady Fortuna Versican gold bars. Prices fluctuate, but generally remain close to 2% above the spot gold price.
While the demand for precious metals is understandable, some financial experts suggest that for Costco members, investing in Costco stock may be a more lucrative option.
Why is gold valuable?
Gold is valuable for several reasons. One of the main reasons is its scarcity. This metal is a scarce (non-renewable) natural resource, and its production is limited. Most of the gold found on Earth has already been extracted, so its supply is relatively stable.
Moreover, gold possesses unique physical properties that make it valuable. It is highly resistant to corrosion and chemical alteration, making it ideal for long-term value storage. It is also very easy to work with and mold, making it ideal for creating jewelry and coins.
Gold has also been valued throughout history as a symbol of wealth and power. Many ancient cultures considered it a sacred metal and used it in their ceremonies and to decorate their temples and palaces.
Additionally, gold has a number of industrial uses; it is conductive, does not react with many compounds, and is resistant to corrosion.
In summary, gold is valuable due to its scarcity, its unique physical properties, its symbolic value, and its use in industries.
How much gold is there in the world?
The total amount of gold on the planet is difficult to measure accurately due to the complexity of the geological processes that have formed it and because much of it is located in deep and difficult-to-access deposits. However, it is estimated that the total amount of gold on the planet is around 170,000 tons.
Of that amount, about 170,000 tons have been extracted throughout history. Most of this gold has been used for jewelry and coin manufacturing but is also used in a variety of industrial applications, such as electronics and medicine.
Although the total amount of gold on the planet is limited, it is estimated that there are still significant unexploited deposits or veins around the world. However, extraction can be costly and difficult due to the complexity of the geological processes and environmental limitations.
Can gold be manufactured? Is there artificial gold?
It is not possible to manufacture gold, but through processes, different types of gold such as rose or white gold can be obtained.
Alchemy is an ancient practice that sought to transform common metals into gold and create the “elixir of life” that granted immortality. Although this technique has been sought for centuries, there is no scientific evidence that indicates it is possible to produce gold in this way.
How is the value of gold determined?
The value of gold is determined mainly by its purity and weight. The purity of gold is measured in karats (k), with 24k being pure gold, meaning it contains only gold, while other alloys may contain other metals such as silver, copper, among others. For example, 18k means that the gold contains 18 parts gold and six parts of another metal.
The value of gold is also determined by its weight, which is measured in grams or troy ounces. A troy ounce is equivalent to 31.10 grams and is the standard unit for measuring the weight of gold in the market.
The price of gold is determined by an exchange rate between gold and the currency in question, the price can vary depending on the supply and demand of the market; it can also be affected by economic and political factors, such as inflation, interest rates, and political stability.
Gold is considered a safe-haven asset, meaning investors often buy gold in times of economic and political uncertainty, which can increase the price of gold.
Why can gold lose its value?
Gold remains valuable, but its value can vary due to various economic and political factors. Some of the reasons why gold can depreciate at certain times include:
- Changes in interest rates: If interest rates increase, investors may prefer to invest in financial instruments with higher returns instead of investing in gold, which can reduce the demand and price of gold.
- Improvement in the economy: If the global economy is growing and economic prospects are positive, investors may feel less need to invest in gold as a safe haven, which can reduce the price of gold.
- Greater supply: If there is greater production of gold, the supply of gold may exceed demand, which can reduce the price of gold.
- Changes in monetary policy: If central banks reduce the amount of gold they hold in their reserves, there may be a greater supply of gold on the market and can reduce the price of gold.
- It is important to note that the value of gold fluctuates and that investment in gold should be part of a diversified portfolio.
