Five Major Ways to Invest in Gold: A Must-Read Gold Selection Guide for Beginners

In recent years, geopolitical tensions and persistent inflation have led more investors to turn to traditional safe-haven assets like gold. However, many people’s understanding of gold investment remains at the stage of purchasing physical gold. In fact, modern gold investment offers a variety of efficient methods to choose from. This article will analyze the five major gold investment channels in depth, helping investors find the most suitable approach based on their style and goals.

Is Now a Good Time to Invest in Gold?

Gold price movements reflect the evolution of the global economy and political landscape. Between 2022 and 2023, gold prices experienced intense volatility, fluctuating between $2,000 and $1,700, mainly influenced by Federal Reserve interest rate hikes and geopolitical conflicts. After entering 2024, the situation changed: expectations of rate cuts in the US increased, and global central banks reached record gold purchase levels (total annual gold purchases reached 1,045 tons, surpassing 1,000 tons for three consecutive years), directly pushing gold prices above $2,700. By September 2025, gold had surged to $3,700, with Goldman Sachs even predicting it could reach $4,000 by mid-2026.

Although the long-term trend remains positive, short-term movements are difficult to predict. For investors aiming to hold gold for long-term appreciation, the key is to seize good entry points rather than waiting to chase after price increases. Long-term strategies can include physical gold, gold savings accounts, or gold ETFs.

If investors seek short-term profit from price differences and can bear market risks, they should consider gold futures or Contracts for Difference (CFDs). These instruments track international gold prices, allowing profit through long or short positions by analyzing price trends. CFDs, in particular, have very low entry barriers—some platforms require only $50 to start trading.

Complete Comparison Table of the Five Major Investment Methods

How to Choose the Most Cost-Effective Investment Method

The best gold investment depends on your goals and trading style. Buying physical gold and jewelry mainly serve as preservation and inflation hedges but involve higher costs and limited liquidity. If your focus is on profit from price differences and flexible trading, financial derivatives are more suitable. Below is a detailed analysis of each channel’s features and applicable scenarios.

1. Physical Gold: The Traditional Choice for Preservation and Hedging

Physical gold includes bars, ingots, jewelry, and commemorative coins, usually purchased at banks or gold shops. Investors generally recommend buying gold bars first, while jewelry and commemorative coins should be approached cautiously due to processing fees and potential wear and tear when selling.

While physical gold has preservation functions, it also has clear disadvantages. It is not an income-generating asset, requires specialized storage (like safes or insurance), and has poor liquidity—often facing the dilemma of “easy to buy, hard to sell.” However, because it can be held physically, many investors still prefer it, especially as a long-term asset allocation hedge.

Where is the best place to buy gold bars?

Taiwan Bank is the top choice for purchasing gold bars. As the only bank in Taiwan offering physical gold trading, it guarantees quality, transparent fees, and low processing costs. Currently, Taiwan Bank agents Swiss bank UBS AG for gold bars, with minimum specifications starting from 100 grams, and options for 250g, 500g, and 1kg. For small purchases, you can go to jewelry shops or pawnshops, but pay close attention to purity, as resale is based on weight in grams. Avoid products with fancy designs or branded gold bars, as they tend to have larger bargaining margins and are harder to resell.

Tax-wise, if the sale of physical gold exceeds NT$50,000, it must be declared as one-time personal trade income. The profit is calculated with a 6% net profit rate and included in the following year’s comprehensive income tax.

Advantages: Low risk, simple transactions, tangible control
Disadvantages: High unit price, requires proper storage, additional costs

2. Gold Savings Account: Low-Cost Paper Gold Solution

Gold savings accounts (also called “paper gold”) offer a way to invest without holding physical gold. Investors purchase gold, which is stored by the bank, and receive a passbook record. All transactions are conducted via bank accounts, eliminating the hassle of physical delivery and storage. Major financial institutions like Taiwan Bank, CTBC Bank, First Bank, and Hua Nan Bank offer this service, and the passbook gold can be exchanged for physical gold upon request.

Gold savings accounts provide three purchase options: buying in TWD, foreign currency, or a dual-currency gold passbook (a new product launched by Taiwan Bank in April 2023). Each method has different handling fees, but overall costs are moderate. Buying in TWD involves exchange rate risk, as international gold prices are quoted in USD; buying in foreign currency incurs currency conversion costs at purchase. Regardless of the method, each transaction involves fees, so frequent trading can accumulate costs. Therefore, it is recommended as a long-term holding tool with low trading frequency.

Tax-wise, gains from buying and selling gold savings accounts are considered property transaction income, and profits are reported in the following year’s comprehensive income tax. Losses can be deducted within the same year, and excess losses can be carried forward for up to three years.

It is advisable to choose Taiwan Bank, E.SUN Bank, or E.SUN Bank for gold savings account transactions.

Advantages: Relatively low risk, supports small investments, can be exchanged for physical gold
Disadvantages: Limited trading hours, currency conversion costs are hard to control, only long positions possible

3. Gold ETF: Low-Threshold, Highly Liquid Investment

Gold ETFs are index funds tracking gold prices, with management fees paid by investors. You can choose domestic or overseas ETFs, with common targets including Taiwan Gold ETF (00635U), US gold ETFs (GLD), and IAU.

Each ETF has different cost structures: Taiwan ETF (00635U) has an annual management fee of 1.15%, 0.15% handling fee, and 0.1% transaction tax; GLD has 0.4% management fee, 0~0.1% handling fee, and 0.32% currency exchange fee; IAU has 0.25% management fee, 0~0.1% handling fee, and 0.32% exchange fee.

The advantage of gold ETFs is low investment threshold and high liquidity, but they can only go long—no short selling. Suitable for beginners and retail investors for long-term investment. To buy US ETFs, you need to open an overseas broker account and perform currency exchange, but this results in lower costs and tracking errors.

Advantages: Easy trading, low entry barrier, high liquidity
Disadvantages: Management fees, trading hours limited, no short selling

4. Gold Futures: High Leverage, Bidirectional Trading

Gold futures are derivative contracts based on international gold prices. Profits depend on the price difference between entry and exit points, with contracts settled at expiration. The main appeal is support for bidirectional trading (long or short), long trading hours (almost 24/7 globally), and leverage through margin trading, allowing small capital to control large positions. This makes futures ideal for short-term trading and professional investors.

International gold prices operate 24/7, linked to global markets, making manipulation difficult. However, futures have expiration dates, and rolling over contracts incurs costs. Holding open positions into delivery months risks forced liquidation. Due to leverage, profits are amplified, but so are losses—risk management is crucial.

Tax-wise, gains from gold futures are currently not taxed, with a very low transaction tax of 0.025%. The tax burden is relatively light.

In Taiwan, futures trading is conducted via the Taiwan Futures Exchange, with limited trading hours. Overseas futures brokers offer nearly round-the-clock trading, with better liquidity and volume.

Advantages: T+0 trading 24/7, flexible bidirectional operation, leverage efficiency
Disadvantages: High leverage risk, need for delivery and rollover, larger capital requirements

5. Gold CFDs: The Lowest Barrier Derivative

Contracts for Difference (CFD) are derivative instruments tracking spot gold prices. Investors profit from price differences without physically holding gold. CFDs support bidirectional trading, with no physical delivery or expiration constraints, making them more flexible than futures. The most notable feature is extremely low entry barriers, abundant leverage options, and costs mainly from bid-ask spreads and overnight financing fees.

Trading gold via CFDs requires no stock research—only analysis of gold price trends, making it more straightforward than stock investing. This tool is especially suitable for quick entry and small capital investments. Income from international gold trading is considered overseas income; if annual income exceeds NT$1 million, it must be included in the basic income tax calculation.

Differences between futures and CFDs:

• CFDs have no fixed contract size, requiring lower margin
• CFDs have no expiration date
• Futures incur transaction taxes and fees; CFDs do not
• Futures require larger capital than CFDs

Advantages: Small initial capital, flexible bidirectional trading, T+0 24/7, easy account opening
Disadvantages: High leverage risk, requires trading skills

Practical Recommendations for Gold Investment

Why do institutional investors favor gold allocation?

As a more volatile asset, gold does not offer fixed income like savings accounts nor unlimited potential like stocks or futures, but its unique value lies in providing stability and confidence to a portfolio. Nearly all investment institutions recommend including gold in asset allocation, with suggested proportions not less than 10% of total assets.

Whenever economic fluctuations, rising inflation, or geopolitical tensions occur, gold investment activity tends to increase. Historical data shows that major systemic risk events (economic shocks, conflicts, wars) often cause significant gold price swings. For example, after the Russia-Ukraine conflict erupted in 2022, gold surged to $2,069; recently, international gold prices again broke through $3,700.

Because the international gold market is large and long-established, it quickly reflects systemic events, leading to rapid rises and falls. This is why many investors see gold as both a short-term profit tool and a strategic asset for portfolio hedging.

Final advice on choosing investment methods:

• For preservation and hedging: Choose physical gold or gold savings accounts, and reduce trading frequency
• For low-cost long-term allocation: Gold ETFs are most suitable
• For short-term trading with sufficient capital: Gold futures are worth considering
• For small, quick entries: Gold CFDs offer maximum flexibility

Regardless of the method chosen, understanding your risk tolerance, setting clear goals, and maintaining discipline amid market volatility are essential.