Gold Bars in the Shopping Cart

The Wall Street Journal comments on Gold Bars in the Costco Shopping Cart.

Costco, which started offering gold bars last year online and in a few stores, has been selling out within hours. Consumers rated gold as a better investment than stocks and mutual funds in 2023 for the first time in a decade, according to a Gallup poll. The price has been hitting record highs.

Gold buyers, especially those on the younger side, say it is a hedge against catastrophe. Even people who aren't building bunkers and predicting doomsday are increasingly preparing for worst-case scenarios. Natural disasters, wars in Ukraine and the Middle East and the Covid-19 pandemic are fresh in the minds of many. There is also fear of financial calamity.

Some millennial investors said they don't trust the financial system, especially after a series of bank failures last year. Searching for a safe store of value some turned to gold—and Costco.

The warehouse retailer said it sold $100 million in gold bars in 2023. It later added silver coins to its inventory. Precious metal sales helped drive 18% year-over-year growth in e-commerce sales during its most recent quarter, which ended in February, Costco said.

Millennial gold bugs

Compared with older generations, millennials have a more optimistic outlook on the benefits of gold, as well as the ease of buying and selling it, according to research by financial-services company State Street. The average millennial allocates 17% of their investments to gold, including exchange-traded funds, while Gen X and baby boomers invest 10% of their portfolio in the metal.