Costco makes hundreds of millions from 24-karat gold bar sales

Costco may be known for its exclusive prices on everything from high-end spirits to food court hot dogs, but an influx of members are digging for gold.

The big-box retailer, which began selling one-ounce, near-pure 24-karat gold bars priced at about $2,000 last fall, has recently seen growing consumer interest amid inflation and economic uncertainty.

“It’s a currency that’s been around for thousands of years. It’s something that retains its value and increases in value over time,” said Hitha Herzog, retail analyst and director of research at H Squared Research, at ABC News. .

In a new equity research note from Wells Fargo, the bank estimates that Costco generated between $100 million and $200 million per month in gold bullion sales.

“We view the addition of gold and silver as a smart move for Costco, as it only strengthens its value position,” the report said. “That being said, pricing at this level and shipping costs suggest that this is, at best, a very low-profit business.”

Although the price is not disclosed online to non-members, the product typically sells for nearly 2% above the spot price, which at the time of publication was approximately $2,354 per troy ounce, up more than $350 since 2023.

Personal finance content creator Humphrey Yang told ABC News he purchased one of the bars at Costco for $2,359.

“I think I’m going to keep it as long as possible and maybe I can pass it on to a future generation,” he said.

Gold is not a guaranteed investment and has fluctuated before reaching today’s record levels.

“The idea is that gold retains its value and that’s why people want to have it as a potential investment in their portfolios,” Herzog said.

Costco limits the amount of gold members can purchase to just 5 ounces per customer.

For those looking to make a short-term investment and considering selling, there is the possibility of a short-term capital gains tax of between 10% and 30%.