In its latest earnings call, Costco announced that total growth recorded in e-commerce sales in the third quarter was led by silver and gold bullion, appliances and gift cards. Gary Millerchip, the company’s chief financial officer, revealed that they recorded a more than 20% increase in online sales in the last quarter.
The company’s latest earnings exceed Wall Street’s expectations, noting in its statement that their members flocked to their warehouses looking for quality goods at affordable prices.
In December 2023, the company revealed that it was selling gold bars worth more than $100 million in a quarter, noting that sometimes the goods would run out in a few hours.
Investigators at Wells Fargo also estimate that about a month ago, the company may have raked in $100 to $200 million in monthly revenue from the products they launched late last summer. These levels, despite being high, are a drop in the bucket for Costco, which recorded net sales totaling $57 billion in the last quarter.
Analysts believe that margins on the company’s silver and gold offerings are probably low. Despite this, the gold rush represents a sign that consumers regard these precious metals as a safe investment, particularly during uncertain times.
Apex Financial Services’ founder Lee Baker stated that anxiety driven by geopolitical tensions and inflation among other issues was making consumers buy gold out of fear. Baker, who is also AARP Georgia’s president, then noted that this had driven the price of gold to record highs, with the metal hitting $2,450 an ounce last month. This is a significant increase from the $2,100 recorded at the start of March.
Advantages of investing in gold include diversification of one’s portfolio, which can help increase returns while also managing risk in the long run. Additionally, precious metals such as silver and gold are regarded as safe-haven assets that hedge against stock market volatility and inflation. It is important for investors to note that while these metals have various advantages, they also have their disadvantages. For instance, precious metals, unlike other assets, do not produce any cash flow through interest or yields.
Those who would like to purchase these metals should monitor the metal prices regularly in order to know when the time has come to sell them. Furthermore, those who would like to store silver or gold in their homes may incur additional costs. This includes investing in a secure place to store the metals such as a safe, as well as insuring them.
This increasing purchase of gold bars by laypeople bodes well for extraction companies such as Newmont Corporation (NYSE: NEM) since they are assured of growing demand not just from major end-buyers, such as central banks, but also retail chains bringing precious metals closer to consumers.
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