COSTCO has imposed buying limits on a popular commodity.
The popular wholesale retailer has seen an influx of buyers on the trending item.
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Costco has leaned into its precious metals market with pure, one-ounce gold bars.
The warehouse giant’s 24-karat gold bars have become a sensation, selling out within hours of restocking.
Its newfound popularity has prompted the company to impose purchase limits.
These limits aim to manage the overwhelming demand after the item went viral.
Initially introduced in 2023, Costco’s gold bars were priced around $1,950 to $1,980.
The bars feature options like the PAMP Suisse Lady Fortuna Veriscan and South Africa’s Rand Refinery.
Despite the high price tag, these bars have flown off the shelves.
A Bloomberg survey revealed that approximately 77% of Costco stores across 46 states reported sellouts within the first week of October 2024.
In response to the fervent buying, Costco implemented a purchase limit.
This restricts members to a maximum of two gold bars per transaction within a 24-hour period.
The limit is to ensure wider access for members and maintain inventory moderation.
A climate of economic uncertainty could be a reason behind the surge in demand for alternative investments.
Analysts from Wells Fargo estimate that Costco’s gold bullion sales have generated between $100 million to $200 million per month.
However, financial experts caution that investing in gold isn’t without risks.
The Commodity Futures Trading Commission (CFTC) has warned that precious metals can be volatile.
As precious commodities are not always safe investments, the CFTC emphasized the importance of due diligence.
Despite these warnings, Costco’s gold bars continue to attract a diverse range of buyers.
The company’s reputation for quality and value has made it a go-to destination for bullion enthusiasts.
Costco has even expanded its precious metals offerings to include silver coins and 1-ounce platinum bars.
With purchase limits in place and a growing product line, Costco is navigating the gold rush with strategic measures to balance customer interest and inventory management.