Retail giant Costco’s recent venture into selling gold bars and coins has sent ripples through the market, with potential implications far beyond mere financial gains. A survey commissioned by the World Gold Council sheds light on how this move could signal new growth avenues within the retail gold sector.
Costco made its mark in the gold market in September 2023, as revealed during the company’s fiscal Q4 earnings call. The Chief Financial Officer, Richard Galanti, disclosed that the demand for one-ounce gold bars from renowned refineries was surpassing supply, with products selling out within hours of being stocked.
Although exact figures remain undisclosed, analysts from Wells Fargo estimated monthly bullion sales between $100 to $200 million. Subsequently, in May, Costco reported a notable 9.1% increase in net sales, reaching $57.39 billion, with a substantial surge of 20.7% in online sales.
The World Gold Council’s survey of 4394 US respondents conducted in May 2024 unveiled intriguing insights. Approximately 55% of the national sample had shopped at Costco in the past year, with a significant portion being active members. The survey delved into respondents’ investment behaviors, revealing that over a quarter had invested in gold within the last five years, showing a preference for gold over cryptocurrencies.
Interestingly, only 17% of respondents were aware of Costco’s gold offerings, yet this awareness seemed to fuel greater interest in gold investments. The survey highlighted demographic trends, with younger individuals and male respondents showing heightened interest in gold as an investment option.
Industry experts suggest that Costco’s move into the gold market could be a game-changer, akin to the introduction of gold-backed exchange-traded funds, potentially attracting a new wave of retail investors and revitalizing interest in gold as a viable asset class.
Costco’s strategic shift into gold sales not only signifies a significant development in the retail sector but also hints at broader implications for the gold market’s future trajectory.
