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With its aggressive pricing, executive Costco members can earn 2% cash back rewards and another 2% cash back when purchases are made with a Costco credit card. Shiels noted that these are attractive incentives for retail consumers. "The timing, heading into a tense US election year where people are fearful of inflation and growing economic uncertainty, is key. Politicians and economists say that inflation has fallen from 9% to 3%, but consumers don't feel that way. There is no simpler way to feel inflation than the impact it has on everyday household items like groceries. And now consumers can purchase the traditional inflation hedge at their local Costco," she said.
Shiels also noted that Costco's robust gold sales have defied a few interesting trends in the physical marketplace. Retailers are buying"While consumers are snapping up bars at Costco, subdued coin premiums and Mint sales estimates indicate aggregate retail demand in the US & Western Europe is subdued," Sheils said.
"While the estimated $200mn per month of sales equates to less than 1% of annual Gold demand, as of March 2024, there were 130million Costco members. At a 5oz Gold cap applied to bar purchases, that equates to 640mn oz of Gold , IF every member purchased," She said."Overall, it's hardly about actual ounces and the impact on Gold's supply/demand balance sheet. Gold does not trade as a true commodity in that sense.
The latest Kitco News Weekly Gold Survey showed retail investors increasingly losing faith in the precious metal, while analysts and institutional players see this week’s consolidation as a harbinger of further gains.Why this new market can delay the demise of the U.S. dollar as the world's reserve currency – Nic Carter