How to invest in gold? Learn about 5 gold trading methods to find the strategy that best suits you.

As global geopolitical risks intensify and inflationary pressures persist, more and more investors are considering including gold in their asset allocation. However, there are many ways to buy and sell gold, ranging from traditional physical gold to options like gold savings accounts, funds, futures, and contracts for difference (CFDs). Each method has its advantages and disadvantages; the key is understanding your investment goals and risk tolerance to choose the most suitable gold investment channel.

Is it still worth entering the gold market at this stage?

Before evaluating gold investment, let’s look at recent market performance. Between 2022 and 2023, gold prices fluctuated significantly between $1,700 and $2,000, mainly influenced by geopolitical conflicts and Federal Reserve rate hikes. In 2024, gold prices started to reverse upward, driven by multiple factors including rising expectations of US rate cuts, global central banks’ record gold purchases (reaching 1,045 tons for three consecutive years), and expanding geopolitical risks. As of September 2025, international gold prices have broken through $3,700, with Goldman Sachs predicting it could reach over $4,000 by mid-2026.

However, it’s important to recognize that gold prices are affected by complex factors, making short-term predictions difficult. The core of long-term gold investment is timing the entry correctly, rather than waiting for prices to rise before entering. If your goal is long-term preservation and appreciation, physical gold, gold savings accounts, or gold ETFs are suitable options. But if you want to capitalize on short-term market fluctuations and profit from price differences, and can bear the associated risks, then market analysis skills and leverage tools like gold futures or CFDs are necessary.

Comprehensive comparison of gold trading methods

Common gold trading methods fall into five categories, each with different investment thresholds, transaction costs, trading hours, and leverage mechanisms:

Where is the most cost-effective place to buy gold?

There is no one-size-fits-all answer; it depends entirely on your investment strategy.

If your goal is preservation and long-term holding, physical gold is the straightforward choice. Physical gold requires more initial capital and involves storage and insurance costs. The safest way to buy gold bars is through reputable banks, which, although charging higher storage fees, guarantee quality. For small amounts, jewelry stores or pawnshops may be more economical, but purity must be verified. Note that physical gold transactions exceeding NT$50,000 must be declared for personal trade income, and tax costs should be considered.

If your goal is to profit from buying and selling price differences, non-physical methods are more efficient. Gold savings accounts and gold ETFs are suitable for medium- and low-frequency trading and long-term holdings, with relatively accessible thresholds. Gold futures and CFDs are designed for short-term traders, allowing two-way trading (long or short), with flexible leverage and very low initial investment. However, remember that short-term trading requires basic technical analysis skills, and leverage amplifies both gains and losses, so risk management is crucial.

Understanding the five gold investment methods one by one

1. Physical Gold: Traditional Hedge

Physical gold includes gold bars, ingots, commemorative coins, and other tangible assets, usually purchased at banks or jewelry stores. It’s recommended to buy gold bars directly, as jewelry and commemorative coins include processing fees, and selling involves paying handling and wear-and-tear costs, leading to higher transaction costs.

Physical gold is not an ideal investment product because it does not generate income (non-interest-bearing asset), and requires paying for secure storage, with relatively poor liquidity (the “hard to buy, easy to sell” phenomenon). However, since it can be physically held, many investors buy for long-term preservation and collection.

Suitable for: Collecting, hedging, preservation

Advantages

• Relatively low risk
• Intuitive buying and selling methods

Disadvantages

• High unit price threshold
• Requires proper storage
• Additional costs (storage fees, insurance)

Taiwanese banks are reliable options for purchasing gold bars, being the only banks offering physical gold trading services in Taiwan. Products range from 100 grams to 1 kilogram, with guaranteed quality and lower processing fees. For small amounts, jewelry stores or pawnshops may be considered, but purity must be verified, as sales are based on weight.

2. Gold Savings Account: Convenient No-Physical-Asset Solution

Gold savings accounts (also called “paper gold”) allow investors to buy gold without physically holding it. Banks keep the gold and provide account records. Transactions are conducted entirely through bank accounts, making it more convenient than buying gold bars. Many banks in Taiwan, such as Bank of Taiwan, CTBC Bank, E.SUN Bank, and Hua Nan Bank, offer this service, with the option to convert back to physical gold at any time.

Gold savings accounts can be purchased in various ways: with New Taiwan Dollars, foreign currency, or the new “dual-currency gold savings account” (which benefits from both TWD and foreign currency exchange rate fluctuations). Different methods have different handling fees; buying with TWD involves exchange rate risk (since international gold prices are quoted in USD), while buying with foreign currency incurs initial currency exchange costs. Overall, both methods have similar costs, with moderate friction, but frequent trading can accumulate significant fees.

Profits from buying and selling gold savings accounts are considered property transaction income and must be reported in the following year’s personal income tax. Losses can be deducted from property transaction income, and any unclaimed losses within three years can be carried forward.

Suitable for: Low-cost long-term investment, low-frequency trading

Advantages

• Relatively low risk
• Small transactions possible
• Can be exchanged for physical gold at any time

Disadvantages

• Only tradable during specific periods
• Only allows buy low, sell high; no short selling
• Involves currency exchange costs

Currently, Taiwan Bank, E.SUN Bank, and E.SUN Bank’s gold savings accounts are popular. Investors can choose based on their needs and fee comparisons.

3. Gold ETF: Small-amount Investment Fund

Gold ETFs are index funds tracking gold prices. Investors can choose Taiwan Gold ETF (e.g., 00635U) or US-listed gold ETFs (e.g., GLD, IAU).

The costs for Taiwan gold ETFs include annual management fee (1.15%), transaction fee (0.15%), and trading tax (0.1%); US gold ETFs like GLD include management fee (0.4%/year), transaction fee (0~0.1%), and currency exchange cost (0.32%); IAU’s costs are management fee (0.25%/year), transaction fee (0~0.1%), and currency exchange cost (0.32%).

The advantages of gold ETFs are low investment threshold, good liquidity, and convenient trading, suitable for beginners and retail investors. The disadvantages are that only long positions are possible (no short selling), trading hours are limited, and they are best suited for long-term holdings.

Suitable for: Low-cost long-term investment, low-frequency trading

Advantages

• Easy and quick to buy and sell
• Relatively low investment threshold
• Sufficient liquidity

Disadvantages

• Need to monitor fund management fees
• Trading limited to business hours

Domestic ETFs in Taiwan can be purchased through local brokers; if you have overseas brokerage accounts, you can directly trade US gold ETFs, which have lower costs and tracking errors, but require opening a US stock account and completing currency exchange procedures.

( 4. Gold Futures: 24/7 Two-way Trading

Gold futures are based on international gold prices. Profit or loss depends on the price difference between entry and exit points, with settlement required at expiration.

The key features of futures are support for two-way trading (long or short), extended trading hours, and low holding costs. After paying margin, traders can leverage their capital for trading, making it especially suitable for short-term trading and professional investors. Gold futures prices are linked 24/7 to international markets, making manipulation difficult.

However, futures have clear disadvantages: all contracts have expiration dates, incurring rollover costs; positions in the delivery month may be forcibly closed if not zero; leverage amplifies both gains and losses, requiring capital management and risk awareness. Tax-wise, trading gains are not taxed, only a futures transaction tax )0.0000025( applies.

Suitable for: Short-term trading, swing investing, large investment amounts

Advantages

• T+0, trading anytime
• Supports both long and short positions
• Leverage improves capital efficiency

Disadvantages

• High leverage risk
• Requires delivery and rollover management
• Needs certain trading skills

In Taiwan, futures are traded through the Taiwan Futures Exchange, with limited trading hours. Overseas futures brokers offer nearly 24/7 trading, allowing anytime long or short positions, with better liquidity. Many overseas brokers provide Chinese platforms and services, making operation more convenient.

) 5. Gold CFD: Entry-level Leverage Tool

Gold CFDs are contracts tracking spot gold prices, with the lowest entry barriers and high flexibility.

CFDs support two-way trading, allowing investors to buy or sell without holding actual gold, and without expiration limits, making them more flexible than futures. Initial margin requirements are very low, and leverage options are diverse. Profits come solely from the bid-ask spread, with costs mainly from spreads and overnight financing fees.

Trading gold CFDs does not require stock selection; only price trend judgment is needed, making it relatively simple. However, note that profits from overseas gold CFDs are considered foreign income; if annual income exceeds NT$1 million, it must be included in personal income tax calculations, under the minimum tax regime.

Differences between futures and CFDs

• Futures have fixed minimum contract sizes; CFDs are more flexible with lower margin requirements
• Futures have definite expiration dates; CFDs have no time limit
• Futures require paying transaction fees and futures transaction tax; CFDs do not
• Futures generally require higher capital

Suitable for: Short-term trading, swing investing, small investment amounts

Advantages

• Lowest trading threshold
• Supports both long and short positions
• T+0, trading anytime
• Easy account opening

Disadvantages

• High leverage risk
• Requires basic technical analysis skills
• Platform selection must be cautious

The global CFD market is large, with many overseas trading platforms. When choosing a platform, verify whether it is regulated by reputable international financial authorities to avoid unlicensed or fake platforms. There are indeed some unregulated brokers; investors should be cautious.

Why does gold investment continue to attract attention?

Gold has long been regarded as a core asset in investment portfolios for the following reasons:

Gold’s value preservation property — As a traditional hedge against currency depreciation and rising inflation, gold effectively offsets the risk of purchasing power decline.

Strong global liquidity — Gold has a large, historic global investment market with ample liquidity, making it difficult for any single entity to manipulate prices.

Safe haven during turbulence — Whenever economic uncertainty rises, geopolitical conflicts intensify, or markets face crises, investors flock to gold markets seeking safety.

High institutional recognition — Nearly all investment institutions recommend including gold in asset allocation, with suggested proportions generally not less than 10% of total assets.

Historically, whenever systemic risks such as economic crises, geopolitical conflicts, or wars occur, gold prices tend to fluctuate significantly. For example, after the Russia-Ukraine conflict erupted in 2022, gold prices surged to $2,069; the recent high of over $3,700 also stems from multiple geopolitical and economic risk factors stacking up.

Because gold can both preserve value long-term and experience short-term rapid rises and falls, it serves two types of investors: one uses gold as a hedging tool in their portfolio, while the other views gold volatility as an opportunity for short-term trading and profit. Ultimately, the choice depends on individual investment goals, risk tolerance, and time and effort available.