The short answer
The main ways to invest in gold are physical coins and bars, a gold IRA, exchange-traded funds that hold gold, gold mining stocks, and futures. Physical gold gives you metal you control but costs the most to buy, store and sell. Gold ETFs are the cheapest and simplest way to track the price. Mining stocks and futures add risks of their own. Which suits you depends on why you want gold in the first place.
The options at a glance
| Option | What you own | Main costs | Main risks |
|---|---|---|---|
| Coins and bars | Metal in your hands or a vault | Dealer premium and spread; storage and insurance | Theft, fakes, overpaying |
| Gold IRA | Metal held by a custodian in a retirement account | Setup, custodian and storage fees; dealer premium | High fees; aggressive sales tactics |
| Gold ETFs | Shares of a fund that holds bullion | Annual fund fee | Price swings; you own shares, not metal |
| Mining stocks and funds | Shares in gold-mining companies | Trading costs, fund fees | Company risk; bigger swings than gold |
| Futures and options | Contracts on the future price of gold | Commissions; margin | Leverage can wipe out your money fast |
| Digital or tokenized gold | A token or account backed by gold held by an issuer | Issuer fees, spreads | Depends on the issuer and its custody |
Physical gold: coins and bars
Buying bullion coins or bars means owning the metal directly, with no company or fund between you and it. Many buyers want exactly that. The trade-off is cost: you pay a premium over the spot price when you buy, a dealer pays you less than it charges when you sell, and you need somewhere safe to keep the metal. Our guides to gold coins, gold bars and what gold really costs cover the details.
A gold IRA
A gold IRA is a self-directed retirement account that holds physical metal through a custodian. It lets you own bullion with the IRA’s tax treatment, but the account fees are higher than for an IRA holding funds, and the business attracts aggressive sellers. See what is a gold IRA? and gold IRA fees.
Gold ETFs
A gold exchange-traded fund holds gold bullion in a vault and issues shares that trade on the stock exchange like any stock. You can buy them in a regular brokerage account or an ordinary IRA. The largest charge annual fees of about 0.25% to 0.40% of your investment, with nothing to pay for storage or insurance yourself. The trade-off is that you own shares of a fund, not specific bars, and you can’t take delivery of the metal. Our gold ETFs vs. physical gold guide compares them in detail.
Gold mining stocks and funds
Shares in companies that mine gold give you indirect exposure. Their profits rise sharply when the gold price rises, because their costs stay roughly the same, so mining stocks often move more than gold in both directions. They also carry business risks that gold doesn’t: rising costs, debt, mine accidents, politics in the countries where they operate, and management mistakes. Many investors hold them through funds that spread money across many miners.
Futures and options
Gold futures are contracts to buy or sell gold at a set price on a future date. The standard COMEX contract covers 100 troy ounces, and smaller versions cover 50 and 10 ounces. Futures are traded with margin, a deposit that’s a small fraction of the contract’s value, which multiplies gains and losses. The Commodity Futures Trading Commission gives an example in which a price drop of about 4% would wipe out the entire initial deposit. They’re built for professional traders and hedgers, not for holding gold as savings.
Digital and tokenized gold
Some companies sell tokens or app-based accounts backed by gold held in a vault. Your claim is only as good as the issuer, its custody arrangements and the regulations it operates under, which vary. If you consider one, find out who holds the gold, whether it’s audited, and what happens to your claim if the company fails.
Taxes
| Option | Federal tax on long-term gains |
|---|---|
| Coins, bars and gold ETFs that hold metal | Taxed as collectibles, up to 28% |
| Mining stocks and most mining funds | Regular long-term capital gains rates, up to 20% |
| Gold futures | 60% long-term and 40% short-term, whatever the holding period |
| Gold held in an IRA | No tax until withdrawal from a traditional IRA; none on qualified Roth withdrawals |
How to choose
- You want metal you can hold outside the financial system: coins or bars, stored carefully.
- You want gold’s price at low cost: a gold ETF.
- You want gold in a retirement account: a gold ETF in an ordinary IRA is the cheap route; a gold IRA if you specifically want physical metal.
- You’re comfortable with company risk and bigger swings: mining stocks or a mining fund.
Whichever you choose, keep gold to a share of your savings you could see fall a long way. Our guide to whether gold is a safe investment explains why.
Frequently asked questions
What’s the cheapest way to invest in gold?
Usually a large gold ETF. You pay an annual fee of a fraction of a percent, and there’s no dealer markup, storage or insurance to pay yourself.
What’s the best way for a beginner to buy gold?
If you want metal, start with widely traded 1 oz bullion coins from an established dealer. If you just want exposure to the price, a gold ETF in a brokerage account is simpler.
Are gold mining stocks better than gold?
They can rise faster when gold rises, but they also fall faster and carry business risks. They behave more like stocks than like gold.
Can I invest in gold with a small amount of money?
Yes. A share of a gold ETF, or a small coin or bar, can cost far less than an ounce of gold. Small coins and bars carry higher premiums per ounce, so compare costs.