Monday, April 15, 2024

Why Costco sells gold bars and silver coins

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Costco used to be famous for its $1.50 hot dog-soda combo, but now it’s targeting a new group: people who like to invest in precious metals like silver.

According to CNN, Costco is now selling tubes of 25 Canadian Maple Leaf Silver Coins, each weighing 1 ounce, for $675 online. These coins have a maple leaf on one side and King Charles III on the other. You can’t return the coins, and each member can only buy up to five tubes.

This move follows Costco’s success in selling gold bars online for $2,000 each, which brought in over $100 million in sales last quarter.

But Costco isn’t just doing this to make more money. It’s also about their image. They want to keep up their reputation for offering surprising items in their stores, like a treasure hunt.

The prices of precious metals like gold and silver have been going up lately. This is because investors think the Federal Reserve will lower interest rates later this year. When interest rates are low, people prefer to invest in things like gold and silver instead of bonds, which pay interest.

Some investors also see gold and silver as a way to protect themselves against inflation, when prices of everything go up. Even though the prices of metals can change, they’re seen as a safe bet.

Costco’s strategy seems to be working. Their profits have been strong during the pandemic, and they’ve gained many new members. Their stock price has gone up 60% in the past year.

During their latest earnings report, Costco said they managed to keep prices steady despite inflation. In fact, they even lowered prices on some items, like reading glasses and batteries.

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