Gold Investment Complete Guide: Cost-Benefit Analysis of 5 Major Trading Methods

Current Status of Gold Investment: Why Is It Worth Paying Attention Now?

In recent years, influenced by geopolitical tensions and inflation pressures, gold has regained market attention as a traditional safe-haven asset. From price trends, gold prices experienced sharp fluctuations between 2022-2023, surpassing $2000 at highs and dropping below $1700 at lows, mainly due to the dual impact of Federal Reserve rate hikes and geopolitical conflicts.

Entering 2024, gold prices show a strong upward momentum. Global central banks are record-breaking gold buyers, with net purchases reaching 1045 tons in 2024 (exceeding 1,000 tons for three consecutive years), becoming a key support for gold price increases. Many institutions forecast that gold prices may continue to rise in 2025. For investors in gold, the core strategy at this point should be: find the right entry point rather than blindly chasing the rally.

Two Different Paths of Gold Investment

Depending on your investment goals, gold investment roughly divides into two approaches:

Preservation and Appreciation: Suitable for investors seeking long-term asset allocation. These investors pursue gold’s safe-haven properties and slow appreciation, with a focus on timing the entry. Options include physical gold, gold savings books, or gold ETFs, characterized by relatively fixed costs and controllable risks.

Trading and Arbitrage: Suitable for investors with market analysis skills. These investors profit from short-term fluctuations in gold prices, requiring basic chart analysis skills. Main tools include gold futures and gold CFDs, both supporting two-way trading, with leverage amplifying gains (and losses).

Comprehensive Comparison of Five Gold Trading Methods

Detailed Explanation of Various Gold Investment Methods

1. Physical Gold: Traditional Safe-Haven Choice

Physical gold includes bars, ingots, and commemorative coins. Purchase channels are mainly banks and gold shops; it is recommended to buy large grams bars from banks for quality assurance, though storage fees are involved.

Advantages: Low risk, simple and intuitive buy-sell process, suitable for collection and asset allocation.

Disadvantages: Higher unit price, requires dedicated storage (safes), difficulty in liquidation, and a “hard to sell” phenomenon. Additionally, physical gold is a non-interest-bearing asset, providing no income during holding. Special attention should be paid to purity to avoid high-premium products like counterfeit or high-bid gold bars.

Tax Tip: Transactions exceeding 50,000 MYR must be reported to relevant authorities.

Suitable for: Conservative investors prioritizing safety and long-term preservation.

2. Gold Savings Book: The Convenient “Paper Gold”

A gold savings book refers to banks holding physical gold on behalf of investors, who record holdings via the savings book rather than holding the gold physically. This mode combines the safety of physical gold with trading convenience.

There are three common ways to trade: buy with MYR, buy with foreign currency, or dual-currency gold savings books. Fees vary, but overall friction costs are moderate. Buying with MYR involves exchange rate risk; foreign currency purchases entail upfront currency exchange costs. Frequent trading can accumulate costs; a low-frequency strategy is recommended.

Advantages: Relatively low risk, supports small transactions, can exchange for physical gold anytime, easy to operate.

Disadvantages: Long-only, no short-selling; trading hours limited to bank hours; exchange rate costs are hard to control.

Tax Tip: Frequent trading may be considered commercial activity and must be declared as business income.

Suitable for: Moderate conservative investors seeking stable returns.

3. Gold ETF: Low-Cost Passive Investment

Gold ETFs are exchange-traded funds tracking gold prices. Investors can trade directly through brokers without physically holding gold. Common products include MYR gold ETF(0828EA), US gold ETFs(GLD), and(IAU).

Fee structures vary:

• MYR Gold ETF: management fee 1%/year + transaction fee 0.1%-0.5% + currency exchange 0.3%-1%
• US ETF(GLD): management fee 0.4%/year + transaction fee 0-0.1% + currency exchange 0.32%
• US ETF(IAU): management fee 0.25%/year + transaction fee 0-0.1% + currency exchange 0.32%

ETFs have good liquidity but only support long positions, not short-selling.

Advantages: Easy to buy/sell, low investment threshold, good liquidity, suitable for beginners.

Disadvantages: Ongoing management fees, limited trading hours, no short-selling.

Suitable for: Beginners and retail investors seeking low-cost long-term holding.

4. Gold Futures: Tool for Professional Investors

Gold futures are based on the future price of gold at a specified time in the international market. Investors profit from the price difference between entry and exit. Futures support two-way trading via margin, with leverage amplifying gains (and losses).

Main features:

• Two-way trading: long and short positions
• Low holding costs: only a margin requirement
• Flexible trading: leverage enhances capital efficiency
• Rollover costs: contracts have expiry dates, requiring physical delivery or rollover

Using leverage can magnify both profits and losses. Profits are subject to capital gains tax, GST, etc.

Advantages: T+0 trading 24/7, flexible two-way trading, high capital utilization.

Disadvantages: High leverage risk, requires delivery or rollover, needs professional knowledge.

Suitable for: Experienced short-term traders and institutional investors.

5. Gold CFDs: Flexible and Efficient Derivatives

CFD(追踪现货黄金价格，支持双向交易，无需实际持有黄金，也没有持仓到期时间限制。相比期货，CFD更加灵活——没有固定的最小合约规模，保证金要求更低，没有交易手续费与期货交易税。

CFD的运作逻辑简单：投资者利润来自买卖合约间的价差，进入门槛非常低。只需分析判断金价走势方向，即可双向操作，相比选股要简单得多。

期货与差价合约的核心差异：

• 合约规模：期货有最小限制，差价合约灵活
• 到期日：期货有固定期限，差价合约无限期
• 税务：期货需缴交易税，差价合约相对简洁
• 资金要求：期货门槛更高

Advantages: Very low entry barrier, flexible two-way trading, T+0 trading 24/7, easy account opening.

Disadvantages: High leverage risk, requires basic trading skills, platform selection must be cautious.

Suitable for: Experienced traders seeking high-efficiency short-term operations.

Cost-Benefit Evaluation of the Five Methods

How to Choose the Right Gold Investment Plan for You

Clarify your investment goals: First, determine whether you aim for long-term preservation (choose physical gold/savings book/ETF) or short-term arbitrage (choose futures/CFD).

Assess risk tolerance: Conservative investors should avoid leverage tools; aggressive investors may consider futures or CFDs.

Calculate total costs: Consider not only per-transaction fees but also annual costs like holding costs, currency exchange, management fees, etc.

Consider trading hours: Local tools are limited by business hours; international tools support 24-hour trading.

Choose reputable platforms: CFD markets are mixed; verify whether platforms are regulated by authoritative international financial institutions.

Conclusion

The core of gold investment lies in choosing the right tools and timing. Regardless of the method, follow principles such as: controlling risks reasonably, avoiding blindly chasing rallies, and regularly evaluating strategies. For beginners, it is recommended to start with low-risk, low-threshold products (like ETFs or savings books), gradually gaining experience before considering leveraged trading.