Why is Costco selling gold bars?

A 10-kg bucket of peanut butter. A box of 204 frozen croissants. A 24-karat gold bar. What do all of these items have in common? 

You can buy them all at Costco. 

Driving the news: Costco is now selling one-ounce gold bars online, and they’re getting picked up at a speed usually reserved for Taylor Swift tickets and new Air Jordans. On a recent earnings call, Costco CFO Richard Galanti said new bars typically sell out in hours.

  • The 24-karat Lady Fortuna Veriscan bars from metal refiner PAMP Suisse will run you $2,679.99 in Canada and are limited to two per customer due to high demand.

  • Per some social media users in Asia, gold bars are even available in-store at some locations. Imagine… admiring your new loot while chowing down on a $1.50 hot dog.

Why it’s happening: Given the purchase limit (plus annual Costco membership fees), this isn’t a practical way to make a killing in the gold market. However, having a physical store of wealth, like a gold bar, can bring peace of mind to people with extreme economic anxiety. 

  • “Bank failures, commercial loans defaulting… the outlook for stability in the market isn’t good,” a Genesis Gold Group executive told CNBC. People want a “safe haven.”

  • The executive also mentioned that Costco has seemingly increased its offerings of dried foods and emergency meal kits, which could be viewed as complementary. 

Bottom line: Gold has performed well recently — up ~13% over the past year and ~55% over the past five years. With recession fears high, faith in the central bank to tame inflation low, and survivalist lifestyles on the rise, the hype around gold could be far from over.—QH