How to buy gold at the cheapest price? A comprehensive comparison of 5 major investment channels to see the cost-effectiveness at a glance

Is Investing in Gold Still Worth It Now? Market Background Overview

Since 2024, the international gold market has experienced a significant surge, with gold prices rising from over $2,000 to $2,700, and by September 2025, breaking through the $3,700 mark. Mainstream investment institutions like Goldman Sachs forecast that by mid-2026, gold prices could reach $4,000 per ounce.

This surge is not accidental. Record-breaking central bank gold purchases have played a key supporting role—according to data, global central banks net purchased 1,045 tons of gold in 2024, exceeding 1,000 tons for three consecutive years. This large-scale official gold buying directly pushed up gold prices. Additionally, rising expectations of US rate cuts, escalating geopolitical risks, and other factors have collectively driven the demand for gold as a safe haven.

However, it must be noted that many factors influence gold prices, and short-term fluctuations are difficult to predict accurately. Therefore, choosing the right entry timing is more important than blindly waiting for a surge—whether for long-term preservation or short-term trading, it’s essential to find suitable buy points during market pullbacks.

Why Do Institutional Investors All Allocate Gold?

Gold’s position in traditional investments remains unshakable. Institutional investors generally recommend allocating at least 10% of their portfolios to gold. This is because gold has several unique characteristics:

Hedge Function: Gold is a long-standing safe-haven asset with significant anti-inflation effects. During economic recessions and currency devaluations, gold often maintains or even increases in value.

High Liquidity: The international gold market is large and highly active, allowing investors to buy and sell quickly at any time.

Market Responsiveness: Major economic events, geopolitical conflicts, wars, and systemic risks are often immediately reflected in gold prices. The surge to $2,069 after the outbreak of the Russia-Ukraine war is a clear example.

Therefore, gold can be used both for long-term portfolio risk hedging and for short-term trading to profit from price differences.

Comparison Table of Gold Investment Channels

Long-term Preservation vs. Short-term Trading: The Path of Gold Investment

If the goal is long-term preservation and appreciation, focus on finding good entry points and avoid chasing highs. Suitable for purchasing physical gold, gold passbooks, or gold ETFs, adopting low-frequency, low-cost strategies.

If the goal is to profit from price differences and can bear market risks, then analytical skills are needed to profit through short-term and swing trading. Consider gold futures and gold CFDs, both tracking international gold prices. With proper trend analysis, you can profit from going long or short on price fluctuations.

5 Ways to Buy and Sell Gold in Detail

1. Physical Gold: The Most Traditional Hedge Option

Physical gold includes bars, ingots, jewelry, and commemorative coins, generally available at banks and gold shops. It is recommended to buy gold bars first, and be cautious with jewelry and coins—these contain processing fees, and selling involves paying handling and wear-and-tear fees, making them less cost-effective.

Features of Physical Gold: It does not generate interest, requires special storage equipment (like safes), and has lower liquidity, with a “hard to buy, hard to sell” phenomenon. However, many investors still prefer holding tangible gold for long-term preservation and collection.

Cost Structure: Investing in physical gold incurs higher costs, but it has value as a hedge. Tax-wise, transactions exceeding NT$50,000 must be declared as personal occasional trade income, taxed at a 6% net profit rate, included in the following year’s comprehensive income tax.

Suitable for: Collectors, pure hedge investors

Where to buy more cost-effectively? Taiwan Bank is a relatively reliable and convenient choice, the only bank in Taiwan with physical gold trading services. Their gold bars are from Swiss banks, with guaranteed quality and relatively low fees. Sizes start from 100 grams, with options for 250g, 500g, and 1kg. For smaller amounts, consider jewelry shops or pawnshops, but always verify purity to avoid counterfeit bars (which are highly overpriced) and do not be fooled by appearance or branding.

2. Gold Passbook: Lightweight Paper Gold Investment

Gold passbook (also called “paper gold”) allows investors to buy gold without holding physical assets—banks provide a passbook for safekeeping, and buying/selling is done via bank accounts, much more convenient than physical gold. Many large banks offer gold passbook services, including Taiwan Bank, CTBC Bank, First Commercial Bank, and Hua Nan Bank. Gold passbooks can also be exchanged for physical gold.

Trading Methods: Currently, bank gold passbooks have three types: TWD purchase, foreign currency purchase, and the newly introduced dual-currency passbook. Buying with TWD involves exchange rate risk (since international gold prices are USD-based), while foreign currency purchases incur currency exchange costs. Overall, both methods have similar costs, representing a medium-level cost.

Cost Tips: Each buy/sell incurs fees, and exchange costs are unpredictable, so frequent trading is not recommended. Tax-wise, profits from gold passbook trading are considered property transaction income, to be included in the following year’s comprehensive income tax; losses can be deducted, and deductions can continue for three subsequent years.

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

Recommended banks: Taiwan Bank, E.SUN Bank, E.SUN Bank have relatively complete gold passbook services.

3. Gold ETF: Low-cost Index Fund Option

Gold ETF is a “gold index fund,” which involves management fees. Investors can choose Taiwan Gold ETF (e.g., 00635U) or US gold ETFs (like GLD, IAU).

Cost Structure:

• Taiwan Gold ETF: management fee 1.15%/year + handling fee 0.15% + transaction tax 0.1%
• US ETF (GLD): management fee 0.4%/year + handling fee 0~0.1% + exchange cost 0.32%
• US ETF (IAU): management fee 0.25%/year + handling fee 0~0.1% + exchange cost 0.32%

Features: Gold ETFs have low investment thresholds and high liquidity but can only go long, not short, suitable for beginners and retail investors for long-term investment. Trading directly with brokers avoids many restrictions of traditional banks.

Suitable for: Low-cost long-term investors, low-frequency traders, beginners

Where to buy? Taiwan ETFs can be purchased through domestic brokers; for overseas accounts, US gold ETFs feature low costs and tracking errors, but require opening US accounts and currency exchange.

4. Gold Futures: Advanced Choice for Professional Investors

Gold futures are contracts based on international gold, with profits depending on price differences at entry and exit. Futures allow two-way trading, 24-hour operation, low holding costs, but require margin deposits and leverage.

Features:

• 24-hour global linkage, less susceptible to manipulation
• Relatively low holding costs
• Suitable for short-term trading and professional investors

Risk Warning: All futures have expiration dates, involving costs for rollover or contract switching. Positions held into delivery months may be forcibly closed if not zero. Leverage amplifies both gains and losses; strong capital management and risk awareness are essential.

Tax Benefits: Gold futures are exempt from income tax on trading gains, with only a futures transaction tax of 0.0000025 (25 millionths), very low.

Trading Hours: Taiwan Futures Exchange has shorter trading hours, but overseas futures brokers offer nearly 24-hour trading, allowing anytime long/short operations with better volume and liquidity.

Suitable for: Short-term traders, swing investors, large investment amounts, with professional knowledge

5. Gold CFD: The Lowest Threshold Leverage Trading

CFD (Contract for Difference) tracks the spot gold price, allowing no physical holding and no expiration date, offering more flexibility than futures. CFDs support two-way trading, with very low entry barriers and flexible leverage options.

Trading Features:

• Profit from price differences of buy/sell contracts
• No physical delivery needed
• No fixed expiration, can close anytime
• Main costs are spread and overnight financing fees

Advantages: Trading gold CFDs is simpler than stocks, requiring no stock analysis—just judgment of gold price trends. Tax-wise, international gold trading gains are overseas income, and amounts exceeding NT$1 million annually are included in personal basic income, subject to minimum tax.

Differences between Futures and CFDs:

• Contract size: Futures have fixed minimum sizes; CFDs do not, with lower margin requirements
• Expiration: Futures have expiry dates; CFDs do not
• Fees: Futures involve trading fees and transaction taxes; CFDs mainly have spreads and overnight fees
• Capital requirements: Futures demand higher capital

Suitable for: Short-term trading, swing investing, small capital, experienced traders

Platform Selection: CFD markets are global; currently, Taiwan has no legal CFD exchanges. Most forex platforms offer gold CFD services. When choosing a platform, ensure it is regulated by reputable authorities (e.g., ASIC, FCA) to avoid scams. The platform should offer low-cost trading, flexible leverage, and good Chinese customer support.

Gold Investment Decision Framework

Small amount, short-term, seeking quick profit → Gold CFD

• Starting from just a few US dollars
• Flexible leverage adjustment
• No contract size restrictions

Medium amount, medium-short term, willing to take risks → Gold futures

• Large trading volume, high liquidity
• 24-hour global linkage
• Clear tax advantages

Larger amount, medium-long term, steady appreciation → Gold ETF or Gold passbook

• Transparent, controllable costs
• Suitable for regular fixed investments
• Relatively stable risks

Large amount, seeking collection and preservation → Physical gold

• Strongest hedging function
• Manageable liquidity risk
• Additional spiritual and cultural value

Core Considerations for Gold Buying and Selling

Regardless of the chosen investment method, keep these key principles in mind:

1. Entry timing is crucial
Even with the right investment tool, poor timing can affect overall returns. Avoid waiting for gold prices to skyrocket before entering; instead, look for opportunities during market pullbacks.

2. Balance costs and returns
Different methods have varying fees, leverage costs, and holding expenses. Short-term trading emphasizes transaction costs, while long-term holding focuses on management fees. Choose according to your strategy.

3. Know your risk tolerance
Leverage tools (futures, CFDs) amplify both gains and losses. Beginners should avoid leverage initially, exploring the market with low costs and gaining experience before advancing.

4. Avoid overtrading
Frequent buying and selling increase costs, especially with tools like gold passbooks. Long-term investing requires patience, waiting for truly advantageous opportunities.

In the current geopolitical risks and ongoing central bank gold purchases, gold remains a valuable safe haven. The key is to select the most suitable investment method based on your capital, time horizon, risk appetite, and trading skills, and to enter at reasonable prices.