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There are many ways to own this precious yellow metal. First off, you can buy physical gold in the form of coins or bars. Or you can invest through exchange-traded funds or gold mining stocks.
Our guide below covers how to buy physical gold or invest in alternatives to gain exposure to this precious metal.
Why Buy Gold?
In today’s financial landscape, gold serves as a noncorrelated asset, meaning that its price frequently moves independently of stocks and bonds.
When markets experience turmoil, inflation spikes or geopolitical tensions rise, demand for gold typically increases as investors seek more refuge from uncertainty.
However, gold’s status as a haven investment comes with important limitations. Unlike dividend-paying stocks or rental properties, physical gold generates no income.
That said, there are periods when the precious metal does outperform the broader market. For example, gold delivered a return of more than 27% in 2024 compared to the S&P 500’s 23%.
While many inexperienced investors view gold as a stable asset, gold prices frequently experience significant short-term volatility.
Despite these drawbacks, gold can play a valuable role in a diversified portfolio.
Generally speaking, certified financial planner (CFP) professionals recommend limiting gold to 2% to 5% of your portfolio depending on your age, time, horizon, risk tolerance, investment objectives and current market conditions.
– Marguerita Cheng, a CFP and CEO of Blue Ocean Global Wealth in Gaithersburg, Maryland.
A modest allocation to gold can help reduce portfolio volatility and preserve purchasing power during periods of inflation.
How To Buy Gold
The gold investment landscape has evolved far beyond the coins tucked in safe deposit boxes from the Great Depression era. Today’s investors can choose from physical gold or gold stocks, gold retirement accounts, gold exchange-traded funds, gold mining companies and gold futures.
Owning physical gold provides tangible ownership. But it comes with storage risks and transaction costs. Despite being a method of currency that has held value for thousands of years, physical gold is one of the least liquid ways to own gold in the digital age.
For instance, an ETF with exposure to spot gold prices is more liquid to trade than the physical metal itself. Think of it as being more convenient.
How To Buy Physical Gold
There are three main categories of physical gold.
Gold Bars
Gold bars, like silver bars, typically offer the most cost-effective way to purchase physical gold by weight. Available in standardized sizes ranging from 1 ounce to 1 kilogram, bars generally carry lower premiums over spot price compared to coins or jewelry, as there are fewer manufacturing and marketing costs associated with them.
Investment–grade bars display essential information, including purity, weight and manufacturer details. Standard investment bars contain at least 99.5% pure gold.
Bars can be purchased locally or through online precious metals dealers and specialized retailers, with options for direct delivery or third-party vault storage. The larger the bar, the lower the premium per ounce, though smaller bars can offer more liquidity and flexibility for smaller sales.
Gold Coins
Gold coins are attractive to both investors and collectors due to their government backing and recognizable designs. With gold coins, your investment could appreciate based on their gold content, and their value as a collectors’ item could increase simultaneously.
Popular investment coins include the American Gold Eagle, Canadian Maple Leaf and South African Krugerrand.
Coins typically trade at higher premiums than bars due to manufacturing costs, limited mintages and collectible appeal. Purity levels also vary by coin: American Gold Eagle coins contain 91.67% gold with copper and silver added for durability, while Canadian Maple Leaf coins are 99.99% pure gold.
Authenticity is crucial when buying gold coins. Make sure you purchase your gold from dealers listed in the U.S. Mint’s authorized dealer directory or other sources. Secondary markets may sell coins for less, but counterfeits are more common.
Jewelry
Gold jewelry represents a hybrid investment that combines precious metal exposure with collectibles and art. However, jewelry’s resale value depends heavily on craftsmanship, condition and fashion trends rather than just gold content.
Gold purity in jewelry is measured in karats, with 24-karat pieces containing nearly pure gold and 10-karat items containing less than half. Higher gold content is technically more valuable, but gold is not a particularly durable metal. Jewelry between 14-karat gold and 18-karat gold tends to be the most popular for wearability and aesthetics. Higher-grade gold, such as 22- or 24-karat gold, is more favored for investments.
When purchasing jewelry as an investment, make sure you keep detailed documentation. Receipts, professional appraisals and authenticity certificates prove invaluable during resale or insurance claims.
When purchasing vintage jewelry, provenance refers to the documented history of a piece and can significantly impact the value of jewelry.
Where To Buy Gold
Reputable dealers are essential for safe gold purchases. Many established precious metals retailers operate online platforms offering price comparisons, transparent pricing and insured shipping. Some platforms also provide storage services through professional vault facilities for an additional fee.
Physical gold purchases can be made through local coin shops, jewelers or auction houses. You can even purchase gold bars at Costco, although they do sell out frequently.
While you can get gold almost anywhere, you need to exercise caution.
Verify dealer legitimacy by checking Better Business Bureau accreditation or membership in trade organizations like the Professional Numismatists Guild.
Gold Buying Fees
Gold investing involves several costs that can impact returns over time.
Storage costs: Physical gold requires secure storage solutions. Investors can choose options like a home safe, a bank safety deposit box or a third-party vault service. Every storage method involves ongoing expenses and security considerations that can eat into investment returns.
Insurance: Standard homeowners insurance policies limit coverage for precious metals and jewelry and will typically only cover a low amount, like the first $1,500, according to the Insurance Information Institute. If you plan to store gold in your home, you’ll want to increase your coverage.
Transaction fees: You’ll pay fees of some sort during every gold transaction, whether they are transparent or hidden. Gold purchases typically include premiums over spot price reflecting minting costs, distribution expenses, marketing costs and dealer markups. Selling gold triggers additional costs, with dealers typically charging some kind of markup in the form of assay verification or buying at a discount below the current spot price.
Other Ways To Buy Gold
Investors seeking to diversify into gold without having to physically store it have several options.
Gold ETFs and mutual funds: These funds provide fractional ownership of gold or gold-related portfolios. Popular ETFs like SPDR Gold Shares (GLD) and iShares Gold Trust (IAU) track the value of gold bullion day-to-day. Other funds physically hold gold, invest in gold mining companies or focus on gold futures.
Gold mining stocks: Shares of gold mining companies such as Newmont Corp. (NEM) or Barrick Mining Corp. (ABX.TO) offer investors indirect gold exposure in their portfolios. Keep in mind that mining stocks can be more volatile than gold itself as their prices reflect operational risks, geopolitical factors and other costs in addition to commodity values. Many mining stocks do pay dividends, which can provide a source of income to your portfolio that physical gold cannot.
Futures and options: Futures and options trading are better for experienced investors. Advanced investors can trade gold through derivatives that allow them to speculate on future gold price fluctuations.
Gold individual retirement accounts (IRAs): Gold individual retirement accounts can be an attractive option for investors looking to gain value from physical gold’s appreciation while deferring tax. But please note that taxes are deferred until withdrawn. In our research on the best gold IRAs, we found these accounts often have hidden fees and/or markups that chip away at potential tax savings.
Frequently Asked Questions (FAQs)
Should you buy physical gold or gold ETF/stocks?
This decision depends on your financial goals. Physical gold has long been viewed as a tangible asset to safeguard against volatility. But it requires secure storage, which can incur additional costs. Owning a stock or fund with exposure to gold, on the other hand, allows you to gain exposure to the industry without some of the hassle of physical gold ownership.
Is buying gold online safe?
Buying gold online can be safe as long as you’re purchasing it via a reputable dealer. You’ll want to ensure that the website is HTTPS-encrypted.
When you’re looking up a dealer, you’ll want to see that it’s a legitimate, registered business with a positive consumer rating. You’ll also want to check independent review platforms like Better Business Bureau or Trustpilot for consistent positive customer reviews
Can I buy gold through my IRA or retirement account?
You can buy gold through an IRA, but it has to be a self-directed gold IRA account. You can’t just use a regular brokerage account to house your physical gold. Plus, there are certain rules for gold IRAs. The IRS states gold held in an IRA investment must be of a “certain refined bullion.” Examples of eligible metals include American Eagle, American Buffalo and the Canadian Maple.
Also, you can’t stash the gold at home. Eligible gold must be “in the physical possession of a bank or an IRS-approved nonbank trustee.”