The Five Major Channels of Gold Investment Fully Explained: Buying Gold Bars in the US or Online Trading? Which One Is Best for You

Is there still room for gold prices to rise after reaching new highs?

In 2024, international gold prices have surged all the way, setting new records. From the dramatic fluctuations in 2022-2023 (highs around $2000, lows below $1700) to the recent accelerated rise, multiple factors have driven this trend.

Key Data Review:

• Federal Reserve rate cut expectations signal favorable signals
• Escalating geopolitical risks boost safe-haven demand
• Record-breaking central bank gold purchases: net gold purchases in 2024 reached 1,045 tons, surpassing the thousand-ton mark for three consecutive years
• Gold prices peaked at $4,200, followed by some adjustments

However, it’s important to recognize that gold prices are influenced by many intertwined factors, and short-term trends are highly unpredictable. The core of long-term gold investment is finding the right entry point, rather than chasing high prices. For short-term traders, as long as they master technical analysis and risk management, profit opportunities through price spreads still exist.

Five Gold Investment Methods Comparative Analysis

Which channel should you choose to invest in gold? The answer depends on your investment goals—whether for asset preservation or for profit from price differences. Below is a detailed comparison of various methods:

Route 1: Buying Physical Gold—The Choice of Traditional Investors

Physical gold includes bars, ingots, coins, etc., and is the most “tangible” investment.

Advantages: Relatively low risk, simple and direct trading, collectible value

Disadvantages:

• High unit price, requiring large upfront capital
• Non-interest bearing asset, no income during holding
• High storage costs (safes, insurance)
• Poor liquidity, “easy to buy, hard to sell”
• When liquidating, costs include storage fees, wear and tear, transaction fees

Investment Tips:

• For large quantities, buy from banks (safety and brand assurance)
• For small quantities, consider silver shops (compare prices first)
• Avoid gold jewelry and commemorative coins (high processing fees, large discounts when selling)
• Tax note: amounts exceeding MYR 50,000 must be declared to authorities

Best channels to buy gold bars in the USA

Many large US banks, including JPMorgan Chase, Bank of America, Wells Fargo, offer gold investment services, providing standardized bars (1g, 5g, 10g, 1 oz, etc.), with buyback options, suitable for investors seeking safety and long-term holding.

In Hong Kong, you can purchase through HSBC, Hang Seng Bank, etc.; in Malaysia, mainstream banks like Maybank, CIMB, Public Bank, RHB Bank offer convenient gold buying channels.

Route 2: Paper Gold (Gold Savings Account)—Convenient and Flexible

Gold savings account, or “paper gold,” is where banks hold gold on your behalf; you only hold a certificate, no physical storage needed.

Trading methods:

• Buy with local currency (e.g., MYR)—exposure to exchange rate risk
• Buy with foreign currency—incurs initial currency exchange costs
• Dual-currency gold savings account—combines features of both

Cost structure: Moderate friction costs (fees for each transaction), frequent trading accumulates higher costs

Suitable for: Investors with clear goals, low trading frequency, seeking stability

Tax considerations: If deemed as frequent trading (business activity), must declare income and pay personal income tax

Providers: Maybank, Public Bank, HSBC, RHB Bank, CIMB Bank in Malaysia; some banks in the US and Hong Kong also offer similar products.

Route 3: Gold ETF—Small-scale Long-term Investment

Gold ETF is an index fund tracking gold prices, tradable via securities accounts.

Main products:

• Malaysian: 0828EA (management fee 1%/year + transaction fee 0.1%-0.5% + currency exchange 0.3%-1%)
• US: GLD (management fee 0.4%/year + transaction 0%-0.1% + currency exchange 0.32%)
• US: IAU (management fee 0.25%/year + transaction 0%-0.1% + currency exchange 0.32%)

Features:

• Low entry barrier, easy to buy/sell
• Good liquidity, transparent trading
• Long only, no short-selling
• Suitable for beginners and retail investors

Ideal for: Cost-effective long-term positioning, seeking stable returns

Purchase locations: Via local brokers for Malaysian ETFs; via overseas brokers for US ETFs; Hong Kong market offers products like Hang Seng Gold ETF(7800).

Route 4: Gold Futures—High Returns with High Risks

Futures are based on the future price of international gold, supporting both long and short positions.

Core features:

• T+0 trading, available 24/7 (depending on exchange)
• Leverage amplifies capital utilization (but also risk)
• Requires margin deposit
• Contract expiry involves physical delivery or rollover

Cost considerations:

• Lower trading fees
• Additional costs: futures transaction tax, sales tax, stamp duty
• Rollover costs should not be ignored

Risk warning: Leverage is a double-edged sword—amplifies gains and losses. Strict risk management is essential.

Trading venues:

• US: CME Group’s COMEX gold futures(GC), nearly 24-hour trading
• Hong Kong: HKEX offers gold futures, trading hours 09:15-12:00, 13:00-16:30, 17:15-23:30
• Malaysia: Limited local trading hours, but overseas brokers offer nearly 24-hour trading

Suitable for: Experienced traders with risk tolerance, seeking short-term gains

Route 5: Gold CFDs—Most Flexible Derivative

CFD (Contract for Difference) tracks spot gold prices, no physical holding or expiry date.

Unique advantages:

• Lowest entry barrier (small amounts possible)
• Supports both long and short positions
• Leverage adjustable (from 1x to 100x)
• 24-hour trading
• More flexible than futures (no fixed contract size, no expiry)

Cost structure: Mainly spread and overnight fees (excluding taxes)

Differences between futures and CFDs:

• Contract size: futures fixed, CFDs flexible
• Expiry: futures have expiry, CFDs are indefinite
• Trading taxes: futures incur taxes, CFDs generally do not
• Margin requirements: futures higher, CFDs lower

Risk warning: Leverage magnifies both gains and losses. Beginners should start with low or no leverage to practice.

Trading venues: Globally traded CFDs; Malaysia lacks dedicated exchanges, so trading is through regulated overseas brokers. Hong Kong has high acceptance, with many local and international platforms. Always verify whether the broker is regulated by reputable financial authorities to avoid scams.

How to choose the most suitable investment method?

Long-term preservation investors: Choose physical gold (higher cost but安心) or gold ETFs (low threshold, easy management)

Steady income investors: Choose gold savings accounts (small trades, moderate fees) or gold ETFs (long-term appreciation)

Short-term traders: Choose gold futures (liquidity, trading hours) or gold CFDs (low threshold, high flexibility)

Key recommendations:

1. Clarify your investment goals (preservation vs appreciation vs arbitrage)
2. Assess your risk tolerance and capital size
3. Control trading costs, avoid frequent buying and selling
4. Learn basic technical analysis and risk management
5. Beginners should start small, with low or no leverage to gain experience

There is no absolute “best” in gold investment—only the plan that best fits your current situation.