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Costco (NASDAQ:COST), the US-based retail giant, has expanded its range of precious metals investments by introducing platinum bullion bars and coins to its product line.
Following the successful launch of its gold bullion investment offerings in 2023, which quickly became a popular option among its members, the company has now made 1 ounce platinum bars and coins available for purchase through its online platform.
The platinum bar joining Costco’s growing rank of investment options is a 999.5 fine Fortuna platinum bar, minted by PAMP Suisse, a well-known precious metals refiner. Each bar is individually registered and comes in sealed protective packaging with an Assay Certificate, ensuring the accuracy of the metal content and weight.
Costco also added to its offerings the 2024 1 ounce platinum Canadian Maple Leaf coin, minted by the Royal Canadian Mint, which is struck in 999.5 fine platinum.
Both products are available in limited quantities, with a maximum purchase limit of one transaction containing no more than five bars or coins per Costco member.
Platinum, though not as widely known as gold, is gaining attention due to its industrial applications, such as in automotive catalytic converters, which are essential in reducing vehicle emissions.
Additionally, platinum is used in the production of jewelry and various industrial processes, making it a versatile metal in terms of both investment and practical uses.
The availability of platinum products at Costco further broadens access to precious metals investments, a market that was once considered niche but is now growing in popularity among retail investors. Investors seeking to diversify their portfolios often look at precious metals as a hedge against inflation and market volatility.
Costco’s expansion into platinum also follows a broader trend of precious metals being viewed as an essential part of retirement portfolios. In the US, platinum bars and coins, like gold bullion, can be included in Individual Retirement Accounts and 401(k) accounts, providing a tax-advantaged way for investors to hold physical assets.
However, despite the growing interest in platinum, the metal has not experienced the same level of price appreciation as gold and silver. Over the last year, platinum’s price has increased by just over 10 percent, while gold and silver’s prices have climbed 37 percent and 39 percent, respectively.
Nevertheless, platinum is seen by some analysts as an underappreciated asset that could see greater demand as industrial needs grow and supply remains tight.
At 3 p.m. PDT on October 7, the spot price for platinum was about US$975 per ounce. Costco’s price for its one ounce products is set at US$1,089.99.
Gold bullion ‘flying off’ Costco shelves
Costco’s gold bullion sales have also been skyrocketing as the yellow metal’s price hits record highs.
The retailer is currently moving over US$100 million worth of gold bars in a single quarter, which is equivalent to about 51,740 ounces.
Shoppers are enticed by Costco’s relatively low premiums — just 1.6 percent above spot prices, compared to higher margins at traditional dealers — and the added rewards from membership perks.
A Bloomberg survey also found that of the stores that responded, 77 percent of Costco outlets that stocked gold bars were sold out in the first week of October, showing the fierce demand.
With gold prices surpassing US$2,650 per ounce this year, customers are flocking to the big-box retailer to capitalize on the metal’s safe-haven appeal amidst economic uncertainty and inflation concerns.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.