Online American shoppers are finding what they think are bargains at Costco, America’s big-box retail discount club: gold. The retail warehousing giant says customers snapped up more than $100 million of the precious metal in the quarter ending November 26.
Costco Chief Financial Officer Richard Galanti revealed the sales during the company’s earnings call late last week.
On Friday, the Costco website listed one-ounce bars at a price of $2,069.99 an ounce, higher than the latest spot price of $2,020.58.
Customers are limited to two bars per Costco membership, making it impossible to build a significant gold position – two bars represent a very short long position.
Costco began selling gold online in September, and it comes “in a sealed black assay card” and is “individually stamped with a unique serial number.”
Reports on whether it is refundable vary.
Costco’s website shows one-ounce bars of 24-karat gold from Rand Refinery in South Africa and Swiss supplier PAMP Suisse.
Spot gold prices have risen by about 12% this year. Many forecasters expect higher prices next year, though that will depend on the Fed’s actions regarding interest rates, bond yields, and the value of the US dollar.
Many of these American purchasers may not understand that for them to profit from gold, the US economy would have to enter a severe recession. They may also be unaware that the single biggest driver of gold demand and prices, apart from geopolitical and economic factors, has been sustained buying by China over the past 13 months.