Analysis of the five major channels for gold investment: Choosing the right buying and selling strategies for yourself

Gold, as a traditional safe-haven asset, is often favored during times of increased global economic uncertainty. Many investors are beginning to consider whether to allocate gold, but beyond physical gold, there are various investment tools available in the market. How can one determine which method best suits their needs? This article will compare the costs, risks, and return characteristics of five major gold investment channels to help you develop a gold trading plan aligned with your investment style.

Is Now a Good Time to Invest in Gold? Price Trends and Long-Term Outlook

To decide whether to enter the market, it’s important to understand gold’s historical performance and future expectations.

Gold prices have experienced significant volatility in recent years. Between 2022 and 2023, gold fluctuated between a high of $2000 and a low of $1700, mainly influenced by geopolitical conflicts and Federal Reserve interest rate hikes. Entering 2024, multiple factors have combined to push gold prices to new highs—weak US dollar expectations, a historic global central bank gold-buying spree, rising geopolitical risks, and more. In 2024, global central banks net purchased 1,045 tons of gold, exceeding 1,000 tons for three consecutive years, directly supporting gold prices to break through the $2,700 mark.

By September 2025, gold prices had surpassed $3,700, and institutional forecasts suggest that by mid-2026, prices could challenge $4,000 per ounce. However, it’s important to note that gold prices are affected by multiple factors, making short-term predictions difficult.

The core of a long-term holding strategy is choosing the right entry point, rather than chasing high prices. If your goal is preservation and appreciation, low-cost tools like physical gold, gold savings accounts, or gold ETFs are suitable. Conversely, if you are willing to accept market volatility for higher profits, short-term trading through gold futures or contracts for difference (CFDs) can be more effective for capturing price spreads.

Cost and Risk Comparison of Five Gold Investment Methods

Detailed Explanation of Five Major Gold Investment Channels

1. Physical Gold: Tangible Safe-Haven Asset

Physical gold includes bars, ingots, and commemorative coins, which can be purchased at banks or jewelry stores. Compared to jewelry and commemorative coins, gold bars are a more ideal investment target because the latter two contain processing and handling fees, and selling them involves wear and tear costs, reducing investment efficiency.

The key characteristic of physical gold is that it does not generate interest, and additional storage fees are required. The full process of buying, storing, and selling incurs higher costs, and liquidity is lower compared to other tools (a phenomenon of “easy to buy, hard to sell”). However, because it can be physically held, many investors still prefer physical gold for long-term collection and preservation.

Taiwanese banks are reliable options for purchasing gold bars, which are sourced from Swiss bank (UBS AG), with various specifications starting from 100 grams. For smaller quantities, jewelry stores are an alternative, but it is essential to verify the purity of gold at purchase, as this determines the future resale price.

Tax Reminder: Transactions exceeding NTD 50,000 must be declared as personal temporary business income, calculated at a 6% profit rate, and included in the following year’s comprehensive income tax.

Suitable for: Conservative investors who prioritize risk management, long-term preservation, and asset hedging.

2. Gold Savings Account: Convenience of Paper Gold

Gold savings accounts (paper gold) are managed by banks, where investors only need to hold a certificate, and buying and selling are completed through bank accounts, avoiding the burden of physical storage. Banks such as Taiwan Bank, E.SUN Bank, and Cathay United Bank offer this service, and it is even possible to exchange the gold in the account for physical gold.

There are three ways to purchase gold savings: TWD purchase, foreign currency purchase, and dual-currency gold savings. TWD purchases involve exchange rate risk (since international gold prices are quoted in USD), while foreign currency purchases incur currency exchange costs at the time of transaction. Regardless of the method, overall costs are moderate, but frequent trading can accumulate high transaction fees.

Tax Reminder: Gains from buying and selling are considered property transaction income and must be declared in the following year’s personal comprehensive income tax. Losses can be deducted within the same year, and if not fully deducted, can be carried forward for three years.

Suitable for: Retail investors seeking low-cost, long-term holdings, and small regular investments.

3. Gold ETF: The Most Flexible Index Fund Investment

Gold ETFs (gold index funds) track international gold prices. Investors can choose Taiwan stock gold ETFs or US stock gold ETFs. The cost structure for Taiwan gold ETFs includes annual management fee (1.15%), transaction fee (0.15%), and trading tax (0.1%); US gold ETFs like (GLD) have an annual management fee (0.4%) plus transaction costs and currency exchange (0.32%); (IAU) has an annual management fee (0.25%) plus transaction costs and currency exchange (0.32%).

The advantages of gold ETFs are low investment threshold, high liquidity, and convenient trading, making them very suitable for beginners and retail investors. However, they only allow long positions and cannot profit from falling gold prices through short selling.

Suitable for: Long-term investors seeking low-cost, leverage-free investments.

4. Gold Futures: High Leverage Tool for Short-Term Trading

Gold futures are based on international gold prices, with profits derived from price differences upon entering and exiting positions. Futures feature two-way trading, long trading hours, and low holding costs, typically requiring only margin deposits to leverage trading. Prices are linked to the international market 24/7, making manipulation difficult.

However, futures have delivery dates; holding until the delivery month without closing positions results in forced liquidation, and there are costs associated with rolling over positions. Due to leverage, profits and losses are amplified, requiring investors to have good capital management.

Tax Reminder: Gold futures trading income is no longer taxed, only a futures transaction tax (25‰) applies.

Suitable for: Experienced derivatives traders willing to accept high risks for high returns.

5. Gold CFD: The Lowest Barrier for Long and Short Trading

CFD (Contract for Difference) tracking spot gold prices offers two-way trading, no expiration limits, and no physical delivery, making it more flexible than futures. Investors only need to analyze gold price trends without complex stock picking.

CFD has a very low entry barrier, flexible leverage options, and costs mainly from spreads and overnight fees. Compared to futures, CFDs have no minimum contract size, require lower margin, and are more friendly to investors with limited capital.

Tax Reminder: Income from overseas gold trading exceeding NTD 1 million in a single year must be included in personal basic income and taxed under the minimum tax system.

Suitable for: Traders with limited funds seeking quick market entry and short-term profit opportunities.

Guide to Choosing a Gold Investment Method

Which one should I choose? It depends on your three core considerations:

Consideration 1: Investment Goals

• Preservation and asset allocation → choose physical gold or gold savings account
• Long-term appreciation → gold ETF or gold savings account
• Short-term profits → gold futures or CFD

Consideration 2: Capital Size

• Large capital → physical gold or futures
• Moderate capital → gold savings account or ETF
• Small capital → CFD or ETF

Consideration 3: Time and Effort

• No frequent operation needed → physical gold or ETF
• Can accept periodic monitoring → gold savings account
• Need real-time trading → futures or CFD

Why Gold Investment Is Highly Valued

Institutional investors generally allocate at least 10% of their portfolios to gold. The core advantages of gold include:

• Value preservation: long-term hedge against inflation
• Global liquidity: large international market, tradable at any time
• Safe haven: a secure refuge during systemic risks
• Hedging against devaluation: natural hedge when the US dollar weakens

Major economic events like the Russia-Ukraine conflict and Federal Reserve rate hikes often trigger gold investment surges. Due to the large and long-standing market, gold quickly reflects systemic risks, leading to rapid price swings. This volatility gives gold a dual identity as both a safe-haven asset and a short-term trading target.

Whether as a risk hedge in your investment portfolio or as an opportunity for spread trading, gold deserves a place in your investment plan. The key is to select the most suitable gold buying and selling method based on your risk tolerance and investment cycle.