As gold hits $4,000, precious metals are top sellers at Costco - and a cheat code for boosting its e-commerce business

"As gold prices hit record highs, demand for the precious metal is running hot at Costco. The price of the yellow metal topped $4,000 an ounce for the first time on Tuesday, and is driving strong sales for the wholesale club. While the company didn't break out exact sales figures for the products in its fiscal year earnings call in September, it said the category continued to be a top seller online. Analysts previously estimated that the company sells around $200 million of gold and silver each month."

"Former CFO Richard Galanti has said the supply usually sells out "within hours" of its release. When the metal's spot price rises faster than the retail price, Costco's gold inventory can move quickly, according to posts on the CostcoPM subreddit. Though analysts say the high prices are now dissuading some shoppers from buying bars and coins, Costco still appears to sell through its supplies quickly, based on the subreddit's item listing tracker."

"Costco's ultralow markup is a big part of the wholesale club's appeal for professional and amateur collectors alike. One likened the club store to a "gateway drug" to gold investing in an interview with Business Insider earlier this year. But though Costco's profit on the gold and silver sales is comparatively low, these high-value items are a kind of cheat code for the wholesale club that is still developing its e-commerce business. Routing hundreds of millions of dollars in sales through Costco.com is a quick way for the company to show strong e-commerce growth with relatively low risk or complicated capital investment: it simply buys a batch of gold and sells every ounce of it to members."

Gold topped $4,000 an ounce and drove strong sales at Costco, with the category reported as a top online seller. Analysts estimate about $200 million in monthly gold and silver sales, and former CFO Richard Galanti said supplies often sell out within hours. Subreddit tracking and posts indicate inventory can move quickly when spot prices rise faster than retail, and listings show rapid sell-through despite higher prices deterring some buyers. Costco's ultralow markup attracts collectors and allows the company to route high-value transactions through Costco.com to display e-commerce growth with minimal capital investment.

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