Comprehensive Guide to Gold Investment Channels | In-Depth Analysis of the Risks and Returns of the Five Major Investment Methods

In an era of tense international situations and soaring prices, many investors are turning their attention to the gold market. However, there are numerous ways to purchase gold—how do you choose the most suitable channel for yourself? This article provides a detailed comparison of five gold investment methods to help you find the option that best aligns with your investment goals.

Is gold investment worth entering? Is now a good time?

Looking at the gold price trends over the past three years, the volatility has been quite intense. Between 2022 and 2023, gold prices briefly reached a high of $2000, then fell back below $1700, mainly influenced by geopolitical conflicts and interest rate hike cycles.

After entering 2024, the situation has shifted. Driven by rising expectations of US rate cuts and large-scale central bank gold purchases worldwide, gold prices have launched a new rally. Data shows that global central banks net purchased 1,045 tons of gold in 2024, exceeding a thousand tons for three consecutive years, directly supporting gold prices to break through the $2,700 mark. By September 2025, international gold prices even surpassed $3,700, with some institutions predicting it could reach $4,000 per ounce by mid-2026.

However, it’s important to note that factors influencing gold prices are quite complex and diverse, making short-term predictions difficult. The key to successful gold buying lies in choosing the right entry point, rather than being swayed by the upward trend. Depending on different investment objectives, strategies should be adjusted accordingly:

Long-term preservation strategy: Focuses on gold’s inflation hedge properties, suitable for purchasing physical gold, gold certificates, or gold ETFs. The emphasis is on finding reasonable prices to buy in batches, rather than chasing high prices.

Short-term profit strategy: If you can tolerate higher volatility and possess market analysis skills, gold futures and CFDs offer leverage tools to profit from price differences. The capital required is relatively low, making it suitable for experienced traders.

Comparison table of five gold investment methods

Where to buy gold? Choose based on your investment goals

The best place to buy gold depends on your investment intent. If preservation is the main goal, physical gold is the traditional choice; if profit from price differences is the aim, financial derivatives are more efficient.

Buying physical gold requires more capital and involves additional costs such as storage and insurance, mainly used for asset protection and collection. Small investors may consider gold certificates or ETFs, which are more convenient and low-cost.

If you want flexible operations to profit from price differences, gold futures and CFDs are more suitable tools. These derivatives track international spot gold prices. With technical analysis skills, you can profit from both long and short positions. However, they carry higher risks and require certain trading knowledge and disciplined capital management.

According to financial institution recommendations, a minimum of 10% of your portfolio should be allocated to gold to hedge systemic risks. Whenever economic turbulence or geopolitical conflicts intensify, the hedging value of gold is reassessed, often pushing prices higher.

First: Physical Gold Investment

Physical gold includes bars, ingots, jewelry, and commemorative coins, mainly purchased through banks and jewelry stores. It is recommended to focus on gold bars; be cautious with jewelry and commemorative coins due to their added processing costs, potential discounts upon resale, and wear and tear, which are unfavorable for preservation.

The main limitation of physical gold is that it does not generate cash flow; profits depend solely on price appreciation. Additionally, costs for storage, insurance, and security persist, and liquidity is relatively poor, leading to the phenomenon of “easy to buy, hard to sell.” Therefore, physical gold is more suitable for long-term collection and asset hedging rather than short-term speculation.

Tax-wise, in Taiwan, transactions exceeding NTD 50,000 must be declared as individual one-time trade income, with a net profit rate of 6%, included in the following year’s personal comprehensive income tax.

Suitable for: Collectors, asset preservation seekers

Where to buy physical gold?

Taiwan Bank is the preferred choice for purchasing gold bars. As the only bank offering physical gold trading services in Taiwan, its products are quality-certified with transparent fee structures. Current offerings include 100g, 250g, 500g, and 1kg bars, all produced by (UBS AG) in Switzerland.

For smaller grams, jewelry stores or pawnshops are also options. Regardless of where you buy, purity is key, as resale is based on weight. Avoid illusionary gold bars or overly decorative items, as these often have inflated bargaining margins.

Second: Gold Certificate Investment

Gold certificates, known as “paper gold,” do not require physical possession; banks hold the gold on your behalf, and transactions are conducted via a certificate account. Compared to buying bars, certificates eliminate storage concerns and offer more convenience. Many large banks offer this service, such as Taiwan Bank, CTBC Bank, E.SUN Bank, and Hua Nan Bank.

Currently, gold certificates are available in three purchase modes: NTD-denominated, foreign currency-denominated, and the newly launched dual-currency certificates. Each has different handling fees. Using NTD involves exchange rate risk, as international gold prices are quoted in USD; foreign currency purchases require initial currency exchange costs. Overall, regardless of the method, total costs are comparable, representing moderate transaction expenses.

Note that frequent buying and selling can accumulate significant fees and currency exchange costs. It is advisable to adopt a dollar-cost averaging or low-frequency trading strategy to control costs and maximize returns.

Tax-wise, profits from gold certificates are considered property transaction income, to be included in the following year’s personal comprehensive income tax. Losses can offset gains within the same year; if not fully offset, they can be carried over for up to three subsequent years.

Suitable for: Long-term low-cost investors, low-frequency traders

Recommended banks for opening gold certificate accounts

Taiwan Bank, E.SUN Bank, and E.SUN Bank all provide quality gold certificate services. It is recommended to compare spreads and fee structures before opening an account.

Third: Gold ETF Investment

Gold ETFs are “gold index funds” tracking the performance of international spot gold prices. As fund products, management fees are involved. Investors can choose to invest in Taiwan-based or US-based gold ETFs.

Common gold ETFs include:

• Taiwan Gold ETF(00635U)
• US Gold ETF(GLD)
• US Gold ETF(IAU)

Each product has different total costs. Taiwan Gold ETF(00635U) includes management fee(1.15% per year), transaction fee(0.15%), and trading tax(0.1%); US ETF(GLD) has management fee(0.4% per year), transaction fee(0~0.1%), and currency exchange cost(0.32%); US ETF(IAU) includes management fee(0.25% per year), transaction fee(0~0.1%), and currency exchange cost###0.32%(.

Gold ETFs are traded directly through domestic or overseas brokers, making entry relatively low and liquidity ample. The only limitation is that only long positions can be taken; short selling is not possible. This makes them ideal for beginners and retail investors, especially for long-term strategies.

Suitable for: Low-cost long-term investors, beginners

) Where to buy gold ETFs?

Purchasing Taiwan Gold ETF via domestic brokers is the most straightforward. If you have an overseas broker account, you can also buy US gold ETFs, which generally have lower costs and tracking errors, but require opening a US account and currency exchange procedures.

Fourth: Gold Futures Investment

Gold futures are based on international spot gold, with profits or losses derived from the price difference between entry and exit points. Futures contracts have fixed expiration dates, after which delivery or settlement is required.

The main features of futures are two-way trading, long trading hours, and relatively low holding costs. Investors only need to deposit a certain margin to leverage trading, making it especially suitable for short-term traders. Gold futures prices are linked 24/7 to international markets, making manipulation difficult and market depth better.

However, futures trading also has clear disadvantages. Each contract has an expiration date, so traders must bear the costs of rollover or switching contracts. If positions are not closed before expiration, brokers may forcibly close them. Although leverage can amplify gains, it also magnifies losses, requiring strict capital management.

Tax-wise, gold futures are subject to a trading tax of only 0.025% (25 per ten-thousand), as the previous transaction income tax has been suspended.

Suitable for: Short-term traders, swing investors, larger capital investors

Where to trade gold futures?

Mainly through Taiwan Futures Exchange in Taiwan, with limited trading hours. Overseas futures brokers offer nearly 24-hour trading, providing ample opportunities for long and short positions, with higher trading volume and liquidity. Many overseas brokers now offer Chinese interfaces and services, greatly improving user experience.

Fifth: Gold CFD Investment

Gold CFDs are contracts tracking the spot gold price, suitable for investors with derivatives trading experience to quickly enter the gold market.

The unique advantages of CFDs are two-way trading, no physical holding, and no expiration limits, offering greater flexibility than futures. Investors profit from the price difference of the contract, with very low entry barriers, adjustable leverage, and fees mainly from the spread(price spread) and overnight financing costs.

Trading gold CFDs is relatively easy, requiring no fundamental analysis of individual stocks—only an understanding of gold price trends. This makes CFDs a good entry point for investors lacking stock trading experience.

Tax-wise, income from international gold trading is considered overseas income. If annual income exceeds NTD 1 million, it must be included in the personal basic income calculation, with the minimum tax rate applied.

Key differences between futures and CFDs:

• Contract size: Futures have fixed minimum specifications; CFDs have no such restrictions, with lower margin requirements
• Contract expiration: Futures have expiry dates requiring rollover; CFDs do not
• Trading costs: Futures incur commissions and transaction taxes; CFDs do not
• Capital requirements: Futures generally require higher capital

Suitable for: Short-term traders, swing investors, small-capital investors

( Which platform to choose for gold CFD trading?

CFD markets are global, with overseas trading volumes far exceeding Taiwan. Currently, Taiwan has no licensed CFD exchange. Most foreign forex platforms offer gold CFD services.

When choosing a broker, pay special attention to regulatory licensing. Confirm whether the platform is regulated by reputable international authorities such as ASIC, FCA, CIMA, etc., to avoid scams. Many unlicensed or clone platforms exist; investors should stay vigilant.

Why does gold investment continue to attract investors?

Gold’s status as a preservation asset is unshakable. Historically, during major economic crises, geopolitical conflicts, or currency devaluations, gold often demonstrates its “safe haven” characteristic, with prices rising counter to the trend.

Institutional investors and the “smart money” allocate gold in their portfolios recognizing its long-term value preservation and risk hedging role. Unlike fixed-income products like savings deposits, gold does not provide stable cash flow; but compared to stocks or futures with unlimited profit potential, gold offers psychological security and certainty.

Whenever inflation heats up or markets become turbulent, investor attention to gold surges. Historical candlestick charts show that during systemic risk events)wars, crises, financial collapses(, gold prices tend to spike or plummet sharply. For example, after the Russia-Ukraine war broke out in 2022, gold prices soared to $2,069; recently, prices hit new highs, surpassing $3,700.

International gold trading is large-scale and has a long history, with markets quickly digesting major event information, leading to rapid surges or drops. For this reason, gold has two main uses: as a short-term trading tool for profit-taking and as a hedging asset in investment portfolios. Investors should choose the most appropriate way to buy gold based on their risk tolerance and investment horizon.