US Inflation Fuels $100 Million Gold Rush at Costco, Bars Disappear in Hours

Profits from Costco's gold rush are substantial. The Costco CFO, Richard Galanti, revealed during an earnings call on Thursday that the membership-based wholesale retailer sold an astounding $100 million worth of one-ounce gold bars in the previous quarter. Customers snatched up the gold, which sold out in hours despite ongoing inflation.

This fall, the bars, which are out of stock right now, range in price from $1,950 to $1,980. As of Monday, the spot price of gold was above $2,000.

Gold has a reputation as an inflation hedge since it has historically done well during times of economic uncertainty. Early in December, spot gold prices hit a record high of almost $2,100 per ounce due to persistent recession worries.

Last quarter's high profitability were partly attributed to Costco's significant gains. According to a financial statement, the firm made $1.59 in earnings this quarter, up around 17% from the same period last year. On Friday, Costco's shares increased 3% to $653.

Costco's Gold

There are now two gold bar alternatives offered at Costco: a 1-ounce gold bar designed by Lady Fortuna from PAMP Suisse, and another 1-ounce gold bar produced by Rand Refinery in South Africa. These two choices are from reputable businesses. The price of each gold bar is around $2,000.

It's crucial to understand that Costco's actual locations do not sell these gold bars. The Costco website is the only place where you can purchase them.

Because they get their gold from reliable sources, Costco's gold offers a simple, cost-effective way to invest in gold while maintaining quality assurance. Their restricted supply and extra surcharges, however, might constitute obstacles.

If someone wants to invest in gold, they have a few options to think about: purchasing gold bullion from reputable online gold dealers; purchasing gold equities associated with mining firms; or selecting gold ETFs and mutual funds.

There is a limit on how much gold may be acquired through Costco: each membership can only be used to buy two bars. The general response to this cap has been favorable, notwithstanding the possibility that it would discourage investors looking to accumulate substantial holdings in precious metals.

On Costco's website, the gold has received almost 800 reviews with an average rating of 4.9 stars; nevertheless, some customers have voiced dissatisfaction with the high state sales taxes associated with the purchase.

The Price of Gold

The price of gold is affected by a variety of market variables, such as supply and demand, interest rates, market volatility, and possible danger to investors.

Jonathan Rose, co-founder of Genesis Gold Group, told CNBC that although research suggests no meaningful correlation between gold and inflation, people are probably purchasing more gold in an effort to maintain some level of stability in an economy beset by inflation, a challenging real estate market, and a growing mistrust of banks and other financial institutions.

Those who are trying to establish a sense of self-sufficiency that they think will last a volatile monetary market find ownership of real estate enticing.