The Economic Implications Behind Costco’s Shocking Gold Rush 

Executive vice president and chief financial officer Richard Galanti acknowledged the gold rush during the company’s Q4 earnings call, saying, “When we load them on the site, they’re typically gone within a few hours.” 

At the time of this writing, they were sold out. 

The question is:  

Why have so many Americans rushed in to buy the gold bars? 

As The Wall Street Journal recently reported, “When Markets Get Scary, Mom and Pop Buy Gold.”  

David Wagner III, head of markets and equities at Aptus Capital Advisors, agrees and says, “If someone’s going out to buy gold, that means they think that there’s some type of instability at the structural level of the market and/or the government itself.” 

In other words, Costco’s decision to offer gold isn’t just a novel business strategy…  

…it’s a calculated move driven by the collective foresight of a country bracing for further economic tumult because… 

The nation’s fiscal troubles have become impossible to ignore. 

We saw the banking crisis in March…   

We see the purchasing power of the US dollar falling fast…  

We see inflation reflected in the prices of essential goods and services…  

We’re watching interest rates climb to a 22-year high — blocking access to credit for many…  

And now, a growing number of Americans are looking for a stable store of value to help protect their wealth. 

Because the truth is… 

Many Americans are struggling financially. 

According to data from Epiq, one of the nation’s leading bankruptcy experts, personal bankruptcies rose 17% in the first six months of 2023.  

The Federal Reserve of New York’s “Quarterly Report on Household Debt and Credit” shows personal debt has soared to an eye-watering $17 trillion.  

And one trillion dollars of that is credit card debt.  

Additionally, loan defaults and delinquencies are rising. 

Mark Zandi, chief economist at Moody’s Analytics, explains: “The increase in delinquencies and defaults is symptomatic of the tough decisions that these households are having to make right now — whether to pay their credit card bills, their rent or buy groceries.”  

Yet despite the mounting debt, defaults, delinquencies and tough financial decisions… 

Folks are using their credit cards to buy gold bars from Costco in droves. 

It’s truly a sign of the economic times. 

But astute investors who’ve been watching the drama unfold know this rush to gold isn’t limited to Americans who are suddenly reading the economic writing on the wall… 

It’s but one more instance of increased gold buying worldwide. 

As we reported recently, global central bank gold buying in 2023 is the highest level in 55 years.  

Over the last 10 months, China, for example, has added almost 7 million ounces to its holdings. And over the last few weeks, China has sold off 10% of its US Treasury holdings to buy even more gold.  

Russia is buying. So are Japan, Poland, Iraq, India, the Czech Republic and many more. 

Back in the United States, the demand for gold is growing so fast that Costco assistant vice president of financial planning and investor relations told Barron’s they may soon offer the gold bars in physical stores. 

Unfortunately, Costco members are limited to buying two bars.  

Fortunately, Gold Alliance clients have access to the highest-quality gold, and you can acquire as much as you choose. And, at this point, we still have an ample supply to meet the increased demand we’re also seeing. 

But remember, it takes considerable time and effort for gold providers to find, extract, mine, assay and deliver the precious metal.  

And if demand continues to grow, it may put upward pressure on gold’s price.   

Already, gold’s price has risen over 15% in the last year and more than 55% over the last five years. 

Yet recently, you may have noticed a temporary downtick in the price of gold.  

This, for folks who want to protect their wealth, is a good thing. 

American gold buyer Scott Woodridge understands this dynamic and told The Wall Street Journal, “A downtick in the price of a precious metals means you have the opportunity to buy more, and an uptick means your net worth goes up, so it’s a win-win.” 

However, this slight discount isn’t likely to last long. Because gold’s price has historically always trended up long term. 

And if Costco’s empty gold shelves are any indication, that’s a welcomed trend we expect to continue for many years to come. 

Or call 888-529-0399 to schedule a free consultation with an experienced Gold Specialist. There’s no obligation. 

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