Buy Gold Bars at Costco? Why Guns, Gold, and Hard Assets Go Viral

There are a couple of things Americans will flock to purchase in times of turmoil: guns and gold. During the pandemic from March 2020 to March 2022, nearly 60 million guns were sold in the United States as nationwide racial justice protests and post-election strife added to people's security concerns.

The U.S. Mint also reported that it could not meet the demand for its gold and silver bullion coins in 2020 as sales rose by 258%. The numbers show that when the going gets tough, Americans get to buying guns and gold.

Fast forward to today as war rages in Ukraine and Gaza and political tensions in the U.S. polarize the electorate, and Americans are back to doing just that.

Buy Gold Bars at Costco? Guns Are Also Trending

The National Shooting Sports Foundation (NSSF) Firearm Industry Trade Association reported a record year for firearms sales in 2023; and Thursday, bullion prices hit a second record high for the week of $2,377.99 per ounce as buying momentum and global insecurity propelled spot prices of the yellow metal higher.

While you can't yet buy guns at Costco, another doomsday asset is going viral

Long considered a hedge against geopolitical and economic uncertainty, demand for the precious metal hit an all-time high in 2023.

With central banks and consumers worldwide turning to gold as a safe-haven asset amidst inflation and election concerns, the trend shows little sign of abating. Here in the U.S., signs of this gold rush might even be found amongst something as commonplace and red, white, and blue as Costco's floor-to-ceiling pallets of bulk household products and its $1.50 hotdog line.

Costco is Printing Money - Gold Remains In-Demand Asset

In a note to clients on Tuesday, a Wells Fargo equity analyst estimated that Costco is selling as much as $200 million worth of gold to its members a month. The one-ounce, 24-karat gold bars are limited to "1 Transaction Per Membership, with a Maximum of 5 Units" according to the online store, and reportedly sell for about 2% above the market price.

While the "999.9 fine gold minted" bars were sold out online on Thursday, the day's record-high spot gold price would put Costco's member price at around $2,426 per bar.

Minted by the PAMP (Produits Artistiques Métaux Précieux) refinery - part of the MKS PAMP Group headquartered in Ticino, Switzerland - Costco's online store advertises the one-ounce bars as "Swiss-made by a LBMA Good Delivery Refiner." The LBMA, or London Bullion Market Association, "ensures the highest levels of leadership, integrity and transparency for the global precious metals industry" and only awards its accreditation to those refineries that adhere to the association's high standards.

As such an accredited refiner, PAMP must adhere to the rules and guidelines dictated by the LBMA's Responsible Sourcing Programme. PAMP is also a member of the Public-Private Alliance for Responsible Minerals Trade (PPA) which aims to ensure "that no materials extracted from conflict areas or human exploitation are being used." But here is where it gets murky: While Switzerland has no gold mines of its own, it refines two-thirds of the world's gold in four of the world's biggest refineries.

Despite its accreditation and memberships in such industry oversight associations, PAMP is under no obligation to disclose where its unrefined gold originates, nor will it. On November 15, 2023, Switzerland's Federal Court ruled that information regarding gold imports by Swiss companies was protected under tax secrecy law. "The disputed information is covered by the tax secrecy imposed by the VAT law and is therefore excluded from the right to obtain information under the Transparency Act."

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