Costco (NASDAQ:COST) is known for providing bulk items at incredibly low prices, but recently, many investors have increasingly been talking about Costco gold bars as the latest draw to bring folks through the door. (Yup, maybe as much as the $5 chickens and $1.50 hotdog & drink combos).
Analysts provided an update on where they think Costco’s gold bar sales are coming in at. Wells Fargo analysts suggest this business could be worth as much as $200 million a month for the mega-retailer.
I have to say, this number certainly took me aback. That’s because, given where the price of gold is right now, that would amount to nearly 100,000 gold bars a month being sold. Maybe Costco should prioritize displaying its offerings of wall safes next to these bars, given how many appear to be floating around out there.
Here are seven things investors may want to know about this surging business.
7 Things to Know About Costco Gold Bars
- Costco’s sales of gold bars could range between $100 million and $200 million a month, per analysts.
- The company sells 1 oz gold bars for roughly 2% above the spot price, according to estimates.
- At current prices, this would fetch a little more than $2,350 per bar for those interested in purchasing one or two.
- Current sales of these bars are limited to members.
- Only one transaction per membership is permitted.
- However, up to five bars may be purchased per transaction.
- Purchases of Costco gold bars are among the rare transactions that are non-refundable.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
