Costco is selling as much as $200 million in gold bars monthly, Wells Fargo estimates. The retailer began selling gold last August and silver in late January of this year.
The initiative could be adding 18.4% YEAR-OVER-YEAR INCREASED SECOND QUARTER COMPARABLE ECOMM SALES AND ADDING ABOUT 3% TO GENERAL MERCHANDISE SALES.
Costco is selling as much as $200 million in gold bars monthly, Wells Fargo estimates. The retailer began selling gold last August and silver in late January of this year. According to Kelly and his team at the bank, the initiative could be adding 18.4% YEAR-OVER-YEAR INCREASED SECOND QUARTER COMPARABLE ECOMM SALES AND ADDING ABOUT 3% TO GENERAL MERCHANDISE SALES.
Costco Wholesale got into precious metals sales last year with gold bars.
According to a Tuesday research note from Wells Fargo, Costco's sales of gold and silver have grown considerably since then-CFO Richard Galanti announced in mid-December the retailer had sold over $100 million of gold during the first quarter.
Costco reportedly has made more than $100 million in gold sales since entering the precious metals market last year. The research note from Wells Fargo's Kelly estimated sales of those precious metals may now be running at $100-200m per month, which would add almost 1% to total comps, slightly more to US comps, and about 3% to general merchandise sales.
Costco taps into silver coin sales following the overnight success of gold bars. The company saw an 18.4% year-over-year increase in its second-quarter comparable e-commerce sales.
Accuracy
No Contradictions at Time
Of
Publication
Deception
(30%)
The article is deceptive in several ways. Firstly, it states that Costco's sales of gold and silver have grown considerably since the CFO announced they had sold over $100 million during the first quarter. However, this statement is misleading because it implies that these sales are recent when in fact they were made last year. Secondly, the article quotes a research note from Wells Fargo stating that Costco's gold and silver sales may now be running at $100-200m per month which would add almost 1% to total comps, slightly more to US comps, and about 3% to general merchandise sales. However, this statement is also misleading because it implies that Costco's gold and silver sales are a significant portion of their business when in fact they are likely only making up a small percentage of their overall revenue.
The research note from Wells Fargo states that Costco's gold and silver sales may now be running at $100-200m per month which would add almost 1% to total comps, slightly more to US comps, and about 3% to general merchandise sales. However, this statement is also misleading because it implies that Costco's gold and silver sales are a significant portion of their business when in fact they are likely only making up a small percentage of their overall revenue.
The article states that Costco's sales of gold and silver have grown considerably since the CFO announced they had sold over $100 million during the first quarter. However, this statement is misleading because it implies that these sales are recent when in fact they were made last year.
Fallacies
(75%)
The article contains several examples of informal fallacies. The author uses an appeal to authority by citing a research note from Wells Fargo without providing any context or evidence for the accuracy of their claims. Additionally, the author makes use of inflammatory rhetoric when describing Costco's sales as having grown
Costco Wholesale got into precious metals sales last year with gold bars and those may have picked up quite a bit since then-CFO Richard Galanti announced in mid-December the retailer had sold over $100 million of gold during the first quarter.
The research note from Wells Fargo's Kelly estimated sales of those precious metals may now be running at $100-200m per month, which would add almost 1% to total comps, slightly more to US comps, and about 3% to gen. merch. sales.
Costco saw an 18.4% year-over-year increase in its second-quarter comparable e-commerce sales.
Bias
(100%)
None Found At Time Of
Publication
Site
Conflicts
Of
Interest (50%)
There are multiple examples of conflicts of interest in this article. The author has a financial stake in the company they are reporting on as she is an employee at Wells Fargo which owns Costco Wholesale.
$100 million during the first quarter.
$58.44 billion in total revenue.
Author
Conflicts
Of
Interest (50%)
The author has a conflict of interest on the topic of Costco gold and silver sales as they are reporting on their own company's performance.
Costco is selling as much as $200 million in gold bars monthly
Gold has been on a tear this year with spot prices rising more than 13% in 2024.
Sales are limited to five per customer (up from two previously).
The benefits to Costco's top line are clear, but it's not contributing much to profit.
Accuracy
Costco is selling as much as $200 million in gold bars monthly, Wells Fargo estimates
Sales are limited to five per customer (up from two previously)
Pricing and shipping costs suggest that gold sales at Costco may be a low-profit business.
Deception
(30%)
The article is deceptive in several ways. Firstly, it states that Costco's gold sales have turned into a cash cow for the big-box retailer but fails to provide any context or data on how much revenue this represents compared to other products sold by Costco. Secondly, the article quotes an analyst at Wells Fargo who predicts that revenue may now be running at $100 million to $200 million a month, which is not supported by any evidence presented in the article. Thirdly, the article states that gold has turned into money for Costco but fails to provide any information on how this happened or why it was successful. Finally, the article quotes an analyst who says that selling gold bars has been easy for a store priding itself on its variety of consumer choices but does not provide any evidence to support this claim.
The article quotes an analyst at Wells Fargo who predicts that revenue may now be running at $100 million to $200 million a month, but this prediction is not supported by any evidence presented in the article. This is an example of deceptive reporting as it implies that Costco's gold sales are significantly more profitable than they actually are.
The article states that Costco's gold sales have turned into a cash cow for the big-box retailer, but it fails to provide any context or data on how much revenue this represents compared to other products sold by Costco. This is an example of deceptive reporting as it implies that gold sales are significantly more profitable than they actually are.
The article states that selling gold bars has been easy for a store priding itself on its variety of consumer choices, but this claim is not supported by any evidence presented in the article. This is an example of deceptive reporting as it implies that Costco's gold sales are more successful than they actually are.
Fallacies
(70%)
The article contains an appeal to authority fallacy by citing the opinions of analysts at Wells Fargo without providing any evidence or reasoning for their predictions. The author also uses inflammatory rhetoric when describing the rapid acceleration in sales and the sharp uptick in momentum since Costco launched its gold bar product.
Costco officials did not immediate return a request for comment.
Bias
(85%)
The article contains examples of religious bias and monetary bias. The author uses the phrase 'gold has turned into money for Costco' which implies that gold is a form of currency rather than just a commodity. This reinforces the idea that gold is valuable and can be used as an investment, which may not be true for everyone. Additionally, the article mentions Central Banks being large buyers of gold, suggesting they view it as a hedge against financial instability or negative geopolitical outcomes. The author also uses language such as 'persistent bout of inflation' and 'investor fear over the state of the deteriorating U.S. fiscal situation', which may be seen as biased towards those who hold these views.
Central Banks being large buyers of gold
Language such as 'persistent bout of inflation' and 'investor fear over the state of the deteriorating U.S. fiscal situation'
The phrase 'gold has turned into money for Costco'
Costco is selling as much as $200 million in gold bars per month
The price of one-ounce bullion bars has skyrocketed due to the high demand for a safe haven from inflation
Wells Fargo estimates that Costco's revenue may now be running at $100 million to $200 million monthly from its popular one-ounce gold bars alone
Costco is pulling in anywhere from $100 million to $200 million monthly from its popular one-ounce gold bars alone, according to Wells Fargo's Edward Kelly
The price of Costco's nearly pure 24-karat gold bars is estimated at nearly $2,400 an ounce
Accuracy
No Contradictions at Time
Of
Publication
Deception
(50%)
The article is deceptive in several ways. Firstly, it states that Costco is selling as much as $200 million per month in gold bars. However, this statement is not supported by any evidence presented in the article and may be an exaggeration or a misinterpretation of data from another source. Secondly, the article quotes Edward Kelly stating that Costco's aggressive pricing and high level of customer trust have contributed to significant interest in their one-ounce gold bars. However, this statement is not supported by any evidence presented in the article and may be an opinion or speculation rather than a factual claim.
The price of gold has soared 13% this year as investors seek a safe haven from inflation that has remained stubbornly high despite the Federal Reserve raising interest rates to a 22-year high. On Wednesday, the Consumer Price Index came in at a hotter-than-expected 3.5% for March well above the Fed's 2% target to cast doubt on whether the central bankers will begin cutting interest rates as early as June.
Costco is pulling in anywhere from $100 million to $200 million monthly from its popular one-ounce gold bars alone, according to a note from Wells Fargo's Edward Kelly sent Tuesday.
Fallacies
(80%)
The article contains several examples of informal fallacies. The author uses an appeal to authority by citing the opinions of experts without providing any evidence or reasoning for their claims. Additionally, the author uses inflammatory rhetoric when describing how popular Costco's gold bars are and how they sell out quickly. There is also a lack of clarity in the pattern in which new stock comes in, leading to confusion among customers.
The article cites an expert who claims that there has been significant interest given COST’s aggressive pricing and high level of customer trust without providing any evidence or reasoning for their claim. This is an example of an appeal to authority fallacy.
The author uses inflammatory rhetoric when describing how popular Costco's gold bars are, stating that they sell out in seconds and there are Reddit threads dedicated to scoring one. This is an example of a hasty generalization fallacy.
Bias
(100%)
None Found At Time Of
Publication
Site
Conflicts
Of
Interest (50%)
Shannon Thaler has a conflict of interest with Costco and gold bars as she is reporting on the sales revenue generated by these products. She also reports on the price increase in gold which could benefit her employer CNBC.
Shannon Thaler reports for CNBC, a company that may benefit from the increased demand for safe haven assets like gold.
Wells Fargo estimated that $200 million per month in gold bars sales revenue
, Costco's precious metals business is generating strong customer interest and sales with the offering of precious metals to customers.
Costco taps into silver coin sales following the overnight success of gold bars. The company saw an 18.4% year-over-year increase in its second-quarter comparable e-commerce sales.
The addition of gold and silver offerings is seen as a smart move for Costco, as it only reinforces its value position in the retail sector.
Accuracy
Costco prices the product attractively, providing members gold at ~2% above spot prices before a 2% cash back reward for executive members and another 2% in cash back for those with the Citi card.
Gold futures racked up another record high settlement on Monday, with momentum driven primarily by central bank purchases.
Analysts at UBS raised their year-end gold price forecast by $250 to $2,500/oz.
Deception
(100%)
None Found At Time Of
Publication
Fallacies
(70%)
The article contains an appeal to authority fallacy by citing the opinions of analysts without providing any evidence or reasoning for their conclusions. The author also uses inflammatory rhetoric when describing the success of Costco's precious metals business as a 'sharp uptick in momentum'. Additionally, there is no clear dichotomous depiction in the article.
Anthony Bradshaw Wells Fargo highlighted on Tuesday that it may be time for investors to start paying attention to Costco's precious metals business. Analyst Edward Kelly said Costco (NASDAQ:COST) is generating strong customer interest and sales with the offering of precious metals to customers.
The timing by Costco (COST) to offer gold purchases to members has been good.
Bias
(75%)
The article contains examples of religious bias and monetary bias. The author uses the phrase 'Costco's aggressive pricing and high level of customer trust' to suggest that Costco is a trusted source for precious metals due to its reputation as a reliable retailer. This implies that customers are more likely to buy gold from Costco because they trust it, rather than any inherent value in the product itself.
Costco (COST) began selling gold last August and silver in late January of this year.
