How to Choose Gold Investment? A Complete Analysis of the Cost-Effectiveness of 5 Major Buying and Selling Channels

Facing global economic uncertainties and inflation pressures, an increasing number of investors are paying attention to safe-haven assets like gold. However, there are many ways to invest in gold, with significant differences in costs, risks, and returns across various channels. This article will analyze in depth five major investment methods: physical gold, gold savings accounts, gold ETFs, futures, and CFDs, helping you find the most suitable gold trading strategy for yourself.

Is Gold Still Worth Investing in Now?

The gold price trend over the past few years has been dramatic. Between 2022 and 2023, gold prices fluctuated wildly between $1,700 and $2,000, mainly influenced by geopolitical conflicts and Federal Reserve interest rate hikes. Entering 2024, gold prices began a long-term upward trend, with an annual increase of over 20%. This upward momentum continued into 2025, with gold surpassing the $3,700 mark.

Factors driving gold prices higher include: rising expectations of US rate cuts, record-breaking central bank gold purchases (in 2024, global central banks net bought 1,045 tons of gold, exceeding 1,000 tons for three consecutive years), and ongoing geopolitical risks. The market is generally optimistic about gold’s medium-term prospects, with Goldman Sachs and other investment banks predicting gold prices could reach $4,000 by mid-2026.

However, investors need to recognize that gold prices are affected by multiple factors, and short-term fluctuations are difficult to predict. The key to long-term gold investment is to find suitable entry points rather than chasing high prices.

Cost Comparison Table of Gold Investment Methods

Best Choices for Different Investment Goals

Want long-term preservation? Physical gold, gold savings accounts, or gold ETFs are suitable options. These methods have relatively controlled risks and manageable transaction costs. Investors only need to select entry points and hold regularly.

Want short-term profit from price differences? Gold futures or CFDs are the real tools. These derivative instruments allow two-way trading and 24/7 operation, with leverage amplifying both gains and risks. Suitable for advanced investors with technical analysis skills and risk management awareness.

In-Depth Analysis of Buying and Selling Methods

1. Physical Gold — Traditional Safe-Haven Choice

Physical gold includes bars, ingots, jewelry, and commemorative coins, mainly purchased through banks and goldsmiths. It is recommended to prioritize gold bars over jewelry or coins, as the latter include processing fees, and selling involves additional fees and wear-and-tear costs, making investment less efficient.

The biggest advantage of physical gold is its extremely low risk and ease of understanding; disadvantages include high unit price, storage costs, and lower liquidity (often “easy to buy, hard to sell”). Since gold is a non-yielding asset, holding it does not generate income; profits depend solely on price appreciation.

Tax-wise, transactions exceeding NTD 50,000 must be declared as personal occasional trade income, calculated with a 6% net profit rate.

Suitable for: Long-term investors focused on preservation and collection

Advantages: Low risk, easy to purchase, no additional leverage risk
Disadvantages: High unit price, requires dedicated storage, poor liquidity

2. Gold Savings Account — Low-Cost Holding Solution

Gold savings accounts (paper gold) allow investors to hold gold without physical possession, merely recording holdings via bank passbooks. Banks such as Bank of Taiwan, E.SUN Bank, and Cathay United Bank offer this service, and some allow exchange of passbook gold for physical gold.

There are three purchase methods: buy with NTD (but with exchange rate risk), buy with foreign currency (incurring currency exchange costs), or dual-currency gold passbook (benefiting from both NTD and foreign currency exchange rate fluctuations). Overall, fees are moderate, but frequent trading can accumulate significant costs, so low-frequency buying and selling are recommended.

Tax-wise, gains from gold savings accounts are considered property transaction income and must be included in personal comprehensive income tax filings. Losses in the same year can be carried forward for up to three years.

Suitable for: Long-term investors seeking low costs and small investments

Advantages: Lower risk, supports small transactions, can exchange for physical gold
Disadvantages: Limited trading times, only buy low/sell high, currency exchange costs are hard to control

3. Gold ETF — Friendly for Retail Investors

Gold ETFs are gold index funds, allowing investors to choose Taiwan-listed gold ETFs (e.g., 00635U) or US-listed gold ETFs (e.g., GLD, IAU).

Cost components include management fees, transaction fees, and taxes. For example, US gold ETFs have management fees around 0.25%-0.4% annually, transaction fees of 0-0.1%, and currency exchange costs about 0.32%. Overall costs are lower than other methods, with better liquidity.

Gold ETFs feature low investment thresholds and convenient trading but only support long positions, not short selling. They are more suitable for beginners and retail investors aiming for long-term investment.

Suitable for: Low-cost long-term investors, those with high liquidity needs

Advantages: Easy to buy, low entry barrier, good liquidity
Disadvantages: Need to watch management fees, limited trading hours

4. Gold Futures — Professional Investment Tool

Gold futures are contracts based on international gold prices, with profits coming from price differences between entry and exit. Futures offer two-way trading, long trading hours (24/7 trading via overseas brokers), and low holding costs.

Disadvantages include expiration dates (requiring rollover costs), leverage amplifying both gains and losses, and forced liquidation if positions are not closed before delivery months. Tax-wise, futures trading profits are subject to a 25‰ (0.025%) transaction tax, which is relatively light.

Suitable for: Short-term trading, swing trading, professional investors with large capital

Advantages: T+0 trading 24/7, long and short positions, leverage for capital efficiency
Disadvantages: High leverage risk, need to handle delivery and rollover

5. CFD on Gold — Flexible and Efficient Solution

CFD (Contract for Difference) tracks the spot gold price, allowing investors to profit from price differences without holding physical gold. Compared to futures, CFDs have no fixed contract size, no expiration date, and more flexible leverage options.

The entry barrier is very low; investors can open positions with minimal initial margin. The downside is the same leverage risk, requiring investors to have technical analysis and risk management skills.

Tax-wise, overseas gold CFD trading income is considered foreign income, and amounts exceeding NTD 1 million per year must be included in personal income tax.

Suitable for: Short-term trading, swing trading, small-scale investors

Advantages: Low minimum trading amount, two-way trading, T+0 24/7 operation
Disadvantages: High leverage risk, requires certain trading skills

Core Differences Between Futures and CFDs

Although both tools are suitable for short-term trading, they differ significantly:

• Contract Size: Futures have fixed minimum sizes; CFDs are more flexible
• Holding Period: Futures have expiration dates; CFDs can be held indefinitely
• Trading Costs: Futures involve fees and transaction taxes; CFDs mainly involve spreads and overnight fees
• Capital Requirements: Futures generally require higher capital than CFDs

Why Is Gold Investment Popular?

Gold, as a traditional safe-haven asset, has multiple attractions:

Strong Hedge Property: Over the long term, gold prices are positively correlated with inflation, helping to counteract purchasing power decline.

High Global Liquidity: Gold trading volume is large, markets are mature, and it is less susceptible to manipulation by small capital groups.

Safe During Turbulence: During economic crises, wars, or financial turmoil, gold prices often rise countercyclically. For example, during the Russia-Ukraine conflict, gold surged to $2,069, and recent international tensions have pushed prices to new highs.

Essential Portfolio Allocation: Almost all investment institutions recommend including gold in their portfolios, with a typical allocation of at least 10%.

Because gold prices are volatile and react quickly, many investors use gold both as a long-term hedge and for short-term trading to profit from price differences.

Summary: Where Is Gold Cheapest to Buy?

For long-term preservation: Buying physical gold at banks is the safest and most reliable, but storage costs should be considered. For small amounts, jewelry stores are cheaper but require careful purity verification. Gold savings accounts and ETFs offer more convenient holdings, suitable for modern investors.

For short-term traders: Futures and CFDs have lower transaction fees, but the real cost lies in leverage risks. Choosing reputable, regulated brokers with international licenses is crucial to avoid scams.

Ultimate advice: There is no absolute best way to invest in gold; the key is to match your method with your investment goals. Preservation-focused investors should choose physical gold and funds, while traders should consider futures and derivatives. Regardless of the method, understanding risks and investing within your means are essential.