How to Invest in Gold Smartly | A Complete Analysis of 5 Buying and Selling Channels' Costs and Benefits

Want to invest in gold but don’t know where to start? As geopolitical tensions escalate and inflation persists, more and more people are paying attention to gold as a traditional safe-haven asset. However, there are many ways to invest in gold—physical gold, paper gold, gold ETFs, futures contracts, CFDs—each with different costs, risks, and returns. This in-depth comparison of various gold trading channels aims to help you find the most suitable entry method based on your investment goals and risk tolerance.

Is investing in gold worth it now?

Review and Outlook of Gold Market

Gold prices have experienced significant volatility over the past few years. Between 2022-2023, gold fluctuated between $2000 and $1700, mainly under the dual pressures of geopolitical conflicts and Federal Reserve rate hikes.

Entering 2024, the situation has shifted. Expectations of interest rate cuts in the US have increased, and global central banks continue record-breaking gold purchases, pushing gold prices upward to break historical highs. Data shows that global central banks net purchased 1045 tons of gold in 2024 (exceeding 1000 tons for three consecutive years), directly driving the price to over $2700. As of September 2025, international gold prices have risen above $3700, with Goldman Sachs forecasting a mid-2026 peak of $4000.

Core Logic of Gold Investment

Despite the impressive upward trend, short-term movements remain unpredictable. To profit from gold investment, the key is to timing your entry, not chasing highs.

Depending on your investment goals, strategies should differ:

Long-term holding—aimed at preservation and appreciation, suitable for buying physical gold, gold savings accounts, or gold ETFs. No frequent trading needed; focus on entering at relatively low points.

Short-term profit—aimed at earning from price fluctuations, consider gold futures or gold CFDs. These instruments offer two-way trading; with technical analysis and market judgment skills, you can profit from gold’s rise and fall. Some platforms (like overseas futures brokers) require only $50 to start trading, making the barrier to entry very low.

Deep comparison of 5 gold investment methods

Method 1: Direct purchase of physical gold bars—preserves value but does not generate income

Physical gold transactions mainly include gold bars, gold ingots, commemorative coins, etc. While holding tangible gold provides security, from an investment perspective, physical gold has clear disadvantages.

First, physical gold does not generate cash flow; after purchase, aside from inflation hedge, it offers no other income. Second, storage costs are not low—requiring safes or bank custody, which can be costly over time. Third, liquidity is poor—easy to buy but hard to sell, with limited market depth.

Therefore, physical gold is more suitable as a long-term asset preservation or collection, not as an active investment tool.

Where to buy cost-effectively?

Large purchases—recommend going directly to banks (Taiwan Bank is the only official bank with physical gold business). Minimum purchase usually 100 grams, with options for 250g, 500g, 1kg. Bank gold bars have low processing fees and guaranteed quality.

Small purchases—consider jewelry stores or pawnshops. But be sure to verify purity, as resale is based solely on weight. Avoid buying fake or counterfeit gold bars, as bargaining power is low and you may lose money.

Tax tip: If physical gold transactions exceed NT$50,000, declaration is required. Tax is calculated at a 6% profit rate on individual one-time trade income.

Method 2: Gold savings account—no physical asset but with costs

Gold savings accounts (also called paper gold) are a convenient alternative. Banks hold the gold for you; you only need to hold the account certificate, no physical storage worries. Transactions are completed via bank transfers, much more flexible than physical gold.

Many banks offer this service, including Taiwan Bank, CTBC, First Bank, etc. Notably, Taiwan Bank launched a “dual-currency gold savings account” in 2023, allowing investors to benefit from TWD/foreign currency exchange rate movements and gold price fluctuations simultaneously.

Cost structure

Gold savings accounts involve “moderate friction costs.” Whether buying in TWD or foreign currency, handling fees and exchange costs are often comparable. Frequent trading accumulates costs, so low-frequency operation is recommended.

Tax-wise, profits from gold savings accounts are considered property transaction income; losses can be carried forward for 3 years to offset.

Recommended banks: Taiwan Bank, E.SUN Bank, E.SUN Bank’s gold savings services are relatively mature.

Method 3: Gold ETF—low cost and high liquidity

Gold ETFs are essentially gold index funds tracking international spot gold prices. Options include Taiwan stock gold ETF(00635U) or US gold ETFs(GLD, IAU, etc.).

Cost breakdown

Taiwan gold ETF: Management fee 1.15%/year + handling fee 0.15% + transaction tax 0.1% = approx. 1.4% annualized

US gold ETF(GLD): Management fee 0.4%/year + handling fee 0~0.1% + currency exchange 0.32% = approx. 0.72% annually

US gold ETF(IAU): Management fee 0.25%/year + handling fee 0~0.1% + currency exchange 0.32% = approx. 0.57% annually

Compared to physical gold and savings accounts, ETFs have more competitive costs. Also, since they are traded on exchanges, liquidity far exceeds that of physical gold bars.

Advantages: Easy to buy/sell, low investment threshold, suitable for beginners, transparent fees

Disadvantages: Cannot short-sell, trading hours limited, management fees apply

Method 4: Gold futures—24/7 two-way trading

Gold futures are derivative contracts based on international gold. Investors profit by predicting price movements.

Core features

Extended trading hours—overseas futures brokers offer nearly 24-hour trading, much more flexible than Taiwan Futures Exchange (shorter hours).

Two-way operation—can go long (expecting price rise) or short (expecting decline).

Leverage effect—by posting a margin, control a larger amount of gold, amplifying gains and losses.

Low holding costs—no storage fees like physical gold.

Risks and costs

The biggest risk is delivery at expiration. Futures contracts have fixed expiry dates; if not closed beforehand, forced delivery occurs, and rollover costs are incurred. Leverage is a double-edged sword—while it can magnify profits, it also increases potential losses.

Tax-wise, trading gains from gold futures are currently not taxed; only a minimal futures transaction tax (0.0000025) applies.

Suitable for: experienced traders with strong risk tolerance and sufficient capital.

Method 5: Gold CFD(—lowest barrier derivative

CFDs are virtual contracts tracking spot gold prices. Investors do not hold physical gold but profit from price differences through buying and selling contracts.

) Why are CFDs popular?

Extremely low investment threshold—some platforms require only $18 to trade 0.01 lots of gold, much lower than futures.

No expiry date—unlike futures, CFDs can be held indefinitely, offering greater flexibility.

Leverage options—typically 1x, 10x, 20x, 50x, even 100x leverage, adjustable based on risk preference.

Simple trading—no need to select stocks, just judge price trend direction, more straightforward than stocks or futures.

Costs and risks

Main costs come from spreads (buy/sell difference) and overnight financing fees. Compared to futures’ transaction tax, CFD costs are more transparent.

High leverage also means high risk. Wrong predictions can lead to rapid small-capital losses. Beginners should start with no leverage or low leverage to build experience before increasing.

Tax-wise, overseas gold trading gains are considered foreign income; exceeding NT$1 million annually requires inclusion in minimum tax calculation.

Suitable for: short-term traders, high risk tolerance, flexible capital.

Futures vs CFD: which to choose?

In summary, futures are suitable for well-funded, professional investors; CFDs are better for beginners and small-capital investors.

Recommendations for choosing among 5 investment methods

If your goal is preservation and hedging

Choose physical gold or gold savings account. Both have the lowest risk and are suitable for long-term holding. Physical gold can be collected; gold savings accounts are more convenient.

If your goal is steady growth

Choose gold ETFs. Low cost, high liquidity, especially suitable for regular savings and passive management.

If you have trading experience and seek short-term profits

Choose between futures and CFDs. If you have sufficient capital, futures are suitable; if limited funds or seeking flexibility, choose CFDs.

Three major reminders before investing

1. Leverage risk—Leverage is a double-edged sword. Beginners should start with low multiples, learn risk management, then gradually increase.

2. Platform selection—CFD markets are mixed; choose regulated platforms under reputable authorities (ASIC, FSC, CIMA) to avoid scams.

3. Technical analysis skills—Short-term trading requires solid skills in candlestick analysis, support/resistance, etc. Practice on demo accounts first.

Why has gold investment remained popular over time?

Gold remains a favorite among global investors due to its unique position.

Systematic risk hedging—During wars, financial crises, or inflation, gold often rises counter to market trends. After the Russia-Ukraine conflict, gold surged to 2069 USD. Recently, hitting new highs above 3700 USD confirms this.

Global liquidity—Gold markets are large and highly liquid; transactions can be completed quickly anytime, anywhere, comparable to major stock indices.

Institutional recognition—Many global investment institutions recommend allocating over 10% of portfolios to gold, highlighting its professional status.

Smart money choice—Because gold provides safety and hedging during market turbulence, institutions and high-net-worth investors consistently include gold in their portfolios.

In summary, choosing the right gold investment channel is more important than chasing high prices. Based on your risk tolerance, investment horizon, and capital, find the method that truly suits you.