How to buy gold investments most cost-effectively? A full analysis of the pros and cons of the 5 major entry channels

International instability and ongoing inflation continue to ferment, leading more and more people to consider buying gold as a hedge. But did you know? Gold investment is not limited to just buying gold bars; there are also gold savings accounts, gold ETFs, gold futures, gold CFDs, and other channels, each with different costs, risks, and returns.

This year, gold prices have surged fiercely, breaking through the $3,700 mark, nearly a 50% increase since early 2024. Goldman Sachs analysts predict it could reach $4,000 by mid-2026. The rally is mainly driven by record-breaking global central bank gold purchases, expectations of US rate cuts, and other factors. So, is it still worth entering now? The answer depends on your investment goals.

Why Have Gold Prices Been Rising? Understand the Market Background Before Investing

Over the past year, gold prices have experienced remarkable gains. In 2024, global central banks net purchased 1,045 tons of gold, exceeding 1,000 tons for three consecutive years, directly supporting gold prices to break through $2,700. Escalating geopolitical conflicts and the Federal Reserve’s shift towards easing policies have also been major drivers of the rise.

But note that gold short-term volatility is high, and long-term trends are influenced by multiple factors, making precise predictions difficult. Therefore, investing in gold is not about predicting peaks and troughs but about finding the right entry method that suits you.

How to Buy Gold? First, Clarify Your Investment Goals

Gold investments can be divided into two main categories:

1. Long-term hold and preservation — If you want to hedge against inflation and protect assets, you can choose physical gold, gold savings accounts, or gold ETFs. These methods have relatively stable costs, lower risks, and are suitable for investors planning to hold for more than 5 years.

2. Short-term trading for profit — If you aim to profit from gold price fluctuations and are willing to accept market risks, consider gold futures or gold CFDs. These tools allow two-way trading (long and short), enable leverage to amplify trading scale with less capital, and are suitable for experienced traders who understand risk management.

Overview of Gold Buying and Selling Methods: How to Choose Among 5 Channels?

Method 1: Physical Gold — The Most Traditional Hedging Tool

Physical gold includes gold bars, ingots, jewelry, and commemorative coins, which can be purchased at banks or jewelry stores. But remember, physical gold does not generate interest income and involves additional costs for storage and insurance.

• Investment threshold: Moderate to high (higher unit cost)
• Buy/sell costs: 1%–5% (including handling fees, wear and tear)
• Liquidity: Moderate, with possible “easy to buy, hard to sell” situations
• Trading hours: Limited to bank or jewelry store hours
• Suitable for: Collectors, long-term preservation, safety-conscious investors

Where is the most cost-effective place to buy gold bars? Taiwan Bank is a reliable choice, offering guaranteed quality with minimum purchase weights starting at 100 grams. For smaller amounts, jewelry stores are an option, but pay attention to gold purity when purchasing. Regardless of where you buy, avoid being misled by fancy designs or brand premiums.

Tax reminder: If physical gold transactions exceed NTD 50,000, personal trade income must be declared.

Method 2: Gold Savings Account — The Convenient Virtual Gold Option

Gold savings accounts (also called “paper gold”) involve purchasing gold through a bank, which keeps and records it for you without requiring physical possession of gold bars. Many large banks offer this, including Taiwan Bank, CTBC Bank, and First Commercial Bank.

• Investment threshold: Moderate (small investments possible)
• Buy/sell costs: About 1% (including handling and exchange rate costs)
• Liquidity: Good, but transactions are limited to bank hours
• Trading hours: Bank operating hours
• Suitable for: Investors seeking low-cost, long-term investment without physical gold handling

Gold savings accounts can be purchased in various ways: using NTD, foreign currencies, or the newer “dual-currency gold savings.” Buying with NTD involves exchange rate risk; foreign currency purchases require currency exchange costs. Overall costs are similar.

Key point: Gold savings accounts are suitable for infrequent trading, as each transaction incurs fees; frequent buying and selling will accumulate costs.

Method 3: Gold ETF — Investment Accessible to Stock Market Beginners

Gold ETFs are index funds tracking gold prices. Investors can buy gold ETFs like stocks without physically holding gold or needing large capital. Popular options include Taiwan’s gold ETF (00635U) and US gold ETFs (GLD, IAU).

• Investment threshold: Low (small purchases possible)
• Buy/sell costs: 0.25%–1.15% (mainly management fees)
• Liquidity: Excellent (high trading volume)
• Trading hours: Stock market hours
• Suitable for: Beginners, retail investors, long-term investors

Costs differ slightly between Taiwan and US gold ETFs. US ETFs generally have lower management fees (0.25%–0.4%), making overall costs cheaper, but require opening a US brokerage account and currency exchange.

Feature: Gold ETFs can only be bought long (buy and hold), not shorted. If you want to participate in price increases without complex trading, this is the most convenient way.

Method 4: Gold Futures — The Choice for Professional Investors

Gold futures are contracts based on international gold prices, allowing two-way trading (long and short), with leverage to amplify capital efficiency. Overseas futures brokers offer nearly 24-hour trading, high liquidity, and real-time international price linkage.

• Investment threshold: High (requires margin)
• Buy/sell costs: About 0.10% (mainly transaction taxes and rollover costs)
• Trading hours: 24 hours (overseas futures)
• Leverage ratio: Varies by broker
• Suitable for: Experienced traders willing to accept risks

Futures offer leverage to increase profits but also magnify losses. They have expiration dates, requiring delivery or rollover at expiry, which incurs additional costs. Beginners should start small and avoid high leverage.

Tax reminder: Gold futures are exempt from futures trading income tax; only a futures transaction tax of 0.025% applies.

Method 5: Gold CFDs — The Most Flexible Short-term Tool

Gold CFDs are contracts tracking spot gold prices, allowing two-way trading without physical ownership or expiration dates. The main feature is extremely low entry barriers, flexible leverage options, and the ability to operate based solely on price trend analysis.

• Investment threshold: Very low (some platforms start at a few tens of USD)
• Buy/sell costs: About 0.04% (mainly spread and overnight fees)
• Trading hours: 24 hours
• Leverage ratios: 1X, 10X, 20X, 50X, 100X (freely selectable)
• Suitable for: Short-term traders, swing investors, those with limited capital wanting quick entry

Main differences between CFDs and futures: CFDs have no minimum contract size (can trade as small as 0.01 lot), no expiration date, lower trading costs, and more relaxed capital requirements.

Risk warning: Leverage amplifies both gains and losses. Beginners should choose lower leverage ratios initially and gain trading experience.

Tax reminder: Income from overseas gold trading exceeding NTD 1 million annually must be combined into personal income tax calculations.

Comparing Costs of Gold Investment Methods

How to Make Gold Investment Most Cost-effective? Based on Your Plan

Want long-term preservation and inflation hedging? Choose physical gold, gold savings accounts, or gold ETFs, and invest regularly without over-trading. Time is your friend; long-term holding can smooth out short-term price fluctuations.

Want quick profits from short-term price swings? Gold futures and CFDs are more efficient tools. But you must have basic technical analysis skills, understand market charts, and react quickly. Beginners should avoid high leverage; starting with low leverage is wise.

Limited funds but want to participate in gold investment? Gold CFDs offer the lowest entry barrier, with some platforms allowing trading for just tens of USD, perfect for those with limited capital wanting to experience trading.

Why Do Institutional Investors Allocate Gold?

The popularity of gold is no accident. As a “safe haven asset,” gold becomes especially valuable during market turmoil and increasing economic uncertainty. Historical data shows that whenever systemic risk events occur (such as wars, financial crises, or soaring inflation), gold prices tend to surge.

After the Russia-Ukraine conflict erupted in 2022, gold briefly soared to $2,069. Recently, geopolitical tensions have escalated again, pushing gold prices to new records. Nearly all investment institutions recommend including gold in their portfolios, with a typical allocation of at least 10% of total assets.

Gold does not offer fixed returns like fixed deposits nor unlimited growth potential like stocks, but it provides investors with psychological security and practical risk hedging. Because of this, gold trading volume is large, and market participants are numerous. Price movements often quickly reflect major events, making gold a popular target for short-term traders.

In summary, how you acquire gold depends on your goals: if you want to protect assets, allocate long-term; if you want quick profits, choose the right entry tools. Pick what suits you, start small—that’s the smart way to invest.