Costco Wholesale Corporation (NASDAQ:COST, ETR:CTO), renowned for its bulk discounts and wide-ranging offerings, is simplifying access to physical gold investment for its vast membership base of over 150 million individuals, especially as the price of gold reaches historic highs.
Last year, the warehouse giant introduced the sale of one-ounce gold bars, restricted to two per customer and priced in line with the prevailing spot gold rates. Since then, it has expanded its portfolio to include other precious metals like silver coins. Wells Fargo estimates indicate that Costco is now transacting between $100 million and $200 million in gold bars and silver coins monthly, showcasing a notable surge in momentum post-launch, driven by factors such as Reddit activity and swift online product sell-outs.
Frank Holmes, CEO of U.S. Global Investors (NASDAQ:GROW), lauded Costco’s initiative, stating that it has streamlined the process of acquiring physical gold in what he describes as a “highly fragmented” market. He highlighted Costco’s appeal, particularly among consumers with higher disposable incomes, attributed partly to its previous association with American Express. Furthermore, demographic data indicates that the primary purchasers of gold are Asian women from China and India, reflecting a cultural affinity for the precious metal. 
Holmes emphasized the enduring allure of gold, referring to it as a form of “portable wealth” that serves as a safeguard for families. Costco’s foray into gold sales coincides with a surge in precious metal prices, with gold recently surpassing $2,400 per ounce.
Holmes noted a consistent trend of significant gold purchases by central banks since 2010, with retail giants like Costco emerging as key players in the gold market. Looking ahead, Holmes anticipates that other major retailers, such as Walmart Inc (NYSE:WMT, ETR:WMT), could follow suit. With gold gaining mainstream acceptance and projected to reach $3,000 per ounce, Holmes envisions a future where gold and silver coins become commonplace offerings on the shelves of major retail chains like Walmart.
