Costco is known for its great deals on oversized products (hot dogs, anyone?) but it’s one of its smallest items with a high price tag that’s causing a bit of a hullabaloo.
The retail giant is now offering up one-ounce bars of gold in both Canada and the U.S. and, apparently, they’re selling like hotcakes.
Costco Canada has the 24-karat PAMP Suisse Lady Fortuna Veriscan bars listed for $2,679.99, but they’re only available to Costco members and there’s a limit on how many can be bought — each member can only purchase two at once, every seven days.
Manitoba customers, it seems, are out of luck, as the listing says they are not available for purchase there. And customers in the territories will have to fork over additional UPS delivery fees.
Speaking during the company’s quarterly earnings call Tuesday, Costco chief financial officer Richard Galanti said the bars are in high demand and getting your hands on one can be tricky right now.
“I’ve gotten a couple of calls that people have seen online that we’ve been selling one-ounce gold bars,” he said. “Yes, but when we load them on the site, they’re typically gone within a few hours, and we limit two per member.”
It’s worth noting that in Canada the price listed on the Costco Canada website is slightly higher than what’s offered to TD Bank customers for the same 24-karat item ($2,670.21.) It is also higher than the price of gold on the open market, which was listed at around $2,552.54 as of market close Wednesday, according to NASDAQ.
The Costco price also doesn’t take into consideration the cost of the $60 annual membership fee or the $120 executive membership fee, but reviewers of the product point to the value of the company’s two per cent cashback offered to executive members, plus any additional cashback programs offered by various credit cards.
According to at least one expert, Costco’s foray into the gold market is a smart move, as a certain portion of the population becomes increasingly concerned about the future.
Jonathan Rose, co-founder of Genesis Gold Group, told CNBC this product meshes with the increased offerings of survivalist goods and dried foods that he’s seen Costco bring into its stores.
“They’ve done their market research. I think it’s a very clever way to get their name in the news and have some great publicity,” he said. “There is definitely a crossover of people living off the land, being self-sufficient, believing in your own currency. That’s the appeal to gold as a safe haven as people lose faith in the U.S. dollar.”
Gold has long been viewed as a safe buy to hedge against inflation, as well as a more stable investment when compared with stocks and bonds. Over the past five years, the price of gold in Canada has risen approximately 64 per cent.