Costco has ventured into the gold market, and it’s paying off big time. According to analysts at Wells Fargo, the retail giant is estimated to be raking in as much as $200 million per month from its gold bar sales. This surge in revenue is a significant leap from the $100 million generated in the first quarter of Costco’s fiscal year.

Costco began selling 1-ounce gold bars last year, and the demand has been so robust that the sales are now being described as a ‘cash cow’ for the company. Edward Kelly, an equity analyst at Wells Fargo, attributes this success to Costco’s competitive pricing and high level of customer trust. The frequency of Reddit posts, quick online sell-outs, and robust monthly e-commerce sales further indicate a sharp uptick in momentum since the launch of gold sales at Costco.

The 1-ounce gold bars, made of nearly pure 24-karat gold, are estimated to be selling at about 2% above the spot price, which currently stands at around $2,357 an ounce. This places the price at Costco just above $2,400. The surge in gold prices, driven by inflation and investor concerns over the U.S. fiscal situation, has contributed to the success of Costco’s gold sales.

While the gold sales have significantly boosted Costco’s top-line revenue, the impact on bottom-line profit is limited. The low premium received for the gold bars, coupled with the 2% cash back for executive members and Citigroup credit card users, means that the gold business is not contributing much to the company’s profit. In fact, the analyst notes that the pricing and shipping costs indicate that it’s a very low-profit business at best.

Despite the limited impact on profit, gold bars are proving to be a lucrative investment for Costco. With gold being viewed as a natural inflation hedge, the sales of gold bars align with the current economic climate, making it a sensible move for the retail giant.