In a striking development, Costco, a renowned retail juggernaut, has reported remarkable sales of gold bars, totaling over $100 million in the first fiscal quarter of 2024.
This news was disclosed during the company’s earnings call, where they also noted a notable 6.1% increase in sales compared to the same period last year. Furthermore, Costco declared a substantial $15 per share special dividend, underscoring its robust financial performance.
The company offers these one-ounce gold bars exclusively to its members, imposing a purchase limit of two bars per individual. These bars, including the PAMP Suisse Lady Fortuna Veriscan and Rand Refinery variants, are crafted from 24-karat gold and are listed on Costco’s website at a price of $2,069.99. Each bar is accompanied by a certificate of authenticity and lab analysis proof, with sales being final and non-refundable. These gold bars are delivered to customers via UPS.
Costco’s stock (COST) exhibited a remarkable performance, reaching a record high of $661.88 and closing at $658.82, which translates to a 4.45% gain in a single day. The company’s stock has witnessed an impressive 47% surge since January 3, from $447.90 per share.
The gold market has experienced significant fluctuations throughout 2023, with prices oscillating below $1900 and surpassing the $2,000 mark on several occasions. As of the latest update, gold is priced at $2,018.19 per ounce. Over the past five years, the value of gold has steadily increased from around $1,200 an ounce in 2019.
Market experts attribute the dynamics of gold prices to various factors, including supply and demand, interest rates, market volatility, and investor risk assessment.
Despite the lack of a direct correlation with inflation, Jonathan Rose, co-founder of Genesis Gold Group, explained to CNBC that the increasing interest in gold is likely driven by individuals seeking stability amidst economic challenges such as inflation, a tough real-estate market, and growing distrust in financial institutions.
Rose further emphasized the preference for tangible assets like gold and silver as safe havens in an uncertain market. This trend reflects a growing desire among people to possess physical assets that offer a sense of security and self-sufficiency, especially in a volatile cash market.
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