**Costco Continues Expansion into Precious Metals Market**
The price of gold continues to soar, with the US warehouse retail giant Costco still selling a significant amount of gold bars. Now, Costco is further delving into the precious metals market by introducing Swiss-made platinum bars.
On Wednesday, October 2nd, Costco announced that in addition to gold bars and silver coins, they are selling
1-ounce platinum bars
on their website for $1,089.99. Costco stated that these platinum bars are only available for online purchase and cannot be shipped to Louisiana, Nevada, or Puerto Rico.
The price of 1-ounce Canadian Maple Leaf platinum coins is the same. Both carry a premium of around $94.
The purity of the platinum bars is 999.5 and they are non-refundable. Only members can make purchases, with each member limited to one transaction, buying a maximum of 5 platinum bars at a time.
Costco’s venture into selling gold bars has been incredibly lucrative. The gold bars were introduced at Costco in August 2023 and sold out within hours of restocking less than two months later. Analysts at Wells Fargo Bank stated in a report in April of this year that Costco sells up to $200 million worth of gold bars each month.
In late January, Costco began selling 25-pack 1-ounce silver coins for $675.
Costco’s Chief Financial Officer, Richard Galanti, mentioned in an earlier earnings conference call that the growth in online sales in the last quarter of 2023 was driven by “gold and recent silver sales.”
Reddit users have already created a subreddit – Costco Precious Metals, to notify each other of updates on gold, platinum, and silver product inventories.
In 2024, gold has been one of the best-performing assets in the market with a return rate close to 30%, while the return rate for the S&P 500 index is around 21%. Gold has benefited from various factors including interest rate cuts by the Federal Reserve, central bank purchases from multiple countries, and geopolitical tensions.
However, platinum prices have experienced significant fluctuations in recent years. Platinum prices have risen more than 15% in the past 12 months, but have dropped over 8% since surpassing $1,100 at the beginning of 2024.
Costco recently announced strong quarterly earnings, mainly driven by its e-commerce business, including electronics, home goods, gift cards, as well as precious metals among other categories.
During the company’s earnings conference call on September 26th, Chief Financial Officer Gary Millerchip informed investors that Costco has been helping customers by maintaining low prices on daily necessities like chicken, Australian nuts, Spanish olive oil, and French baguettes. Millerchip stated, “We hope to be the first to lower prices and the last to raise them.”
Although the revenue from selling precious metals at Costco is significant, research reports indicate that the profit margin on these sales is not high. The company noted that the real value lies in solidifying Costco’s position. Precious metals can be seen as a high-end version of the company’s rotisserie chicken – a way to attract customer attention.