Where is the most cost-effective place to buy physical gold? A comprehensive comparison of the advantages and disadvantages of the 5 major investment channels

International geopolitical conflicts are heating up again, and inflation risks continue to ferment. Gold, as a traditional safe-haven asset, is once again attracting attention. But when many people think of gold investment, the first thing that comes to mind is physical gold bars. In fact, besides buying physical gold, there are many other investment options such as gold savings accounts, gold ETFs, gold futures, and gold CFDs. Each channel has its own cost structure, risk level, and suitable scenarios. This article will compare where to buy physical gold at a good price and the advantages and disadvantages of other investment channels, helping investors find the most suitable purchasing method based on their needs.

Is now a good time to invest in gold? Market outlook for 2026

The past three years of gold price movements have been quite turbulent. Between 2022 and 2023, gold prices fluctuated sharply under the dual pressures of geopolitical conflicts and Federal Reserve rate hikes, dropping from a high of $2,000 to below $1,700, causing many investors to hesitate.

But starting in 2024, the situation has completely reversed. Expectations of US rate cuts have increased, central banks worldwide are collectively buying gold, and geopolitical risks are escalating—all driving gold prices higher. In 2024, global central banks net purchased an astonishing 1,045 tons of gold, exceeding the 1,000-ton mark for three consecutive years, directly supporting gold prices to break through $2,700. Moving into 2025, gold continued to rise, surpassing $3,700 in September. Goldman Sachs analysts even set a target price of $4,000 per ounce by mid-2026.

But it’s important to note that gold prices are influenced by multiple factors, making short-term predictions very difficult. For new investors, the focus should not be on precisely predicting prices but on finding the right entry point. If your goal is long-term holding and appreciation, averaging costs or regular purchases are wiser strategies. If you aim to profit from short-term price swings through trading, you need higher analysis skills and risk tolerance.

Should you buy physical gold at banks or jewelry stores? A detailed analysis of purchasing locations

When it comes to buying physical gold, the most common options are banks and jewelry stores. But these two channels differ greatly in costs, quality, and experience.

Advantages of buying physical gold from banks:

In Taiwan, only Taiwan Bank offers official physical gold trading services. The gold bars sold by Taiwan Bank come from UBS AG in Switzerland, with international quality assurance. The minimum sales unit starts at 100 grams, with options for 250g, 500g, and 1 kilogram. Bank gold is stable in purity, has lower processing fees, and offers security and professional authentication services. They also provide safekeeping options, such as safety deposit boxes, which are relatively secure for long-term storage, though annual fees apply.

The cost of purchasing gold bars is approximately 1%–5%, mainly covering handling and storage fees. For long-term holding, bank safes are relatively safe, but storage fees accumulate annually.

Features of jewelry store purchases:

If you want to buy smaller amounts (e.g., tens of grams), jewelry stores offer more flexibility. They have lower minimums and faster transactions. However, the purity of gold varies, and prices can differ significantly. Buyers need basic skills to identify genuine gold. Also, when selling back, you may face higher transaction fees and wear-and-tear costs, leading to potential difficulties in liquidating.

Hidden costs of physical gold investment:

Besides purchase and storage fees, consider:

• Insurance costs: necessary for long-term storage
• Testing fees: periodic purity verification
• Redemption costs: possible discounts when converting to cash
• Taxes: transactions over NT$50,000 must be reported as personal miscellaneous income, taxed at a 6% profit rate

Overall, physical gold is suitable for investors prioritizing preservation and collection value but not ideal for frequent trading. It’s a tangible asset that provides psychological security but has lower liquidity and trading efficiency compared to other investment tools.

Gold savings account: A middle ground for small investments

Gold savings accounts (also called “paper gold”) are innovative products offered by banks, allowing you to enjoy gold investment benefits without holding physical gold. Many banks in Taiwan provide this service, including Taiwan Bank, CTBC, First Commercial Bank, Hua Nan Bank, as well as newer entrants like E.SUN and Yuanta.

Three ways to purchase gold savings accounts:

Traditional gold savings accounts are denominated in TWD or foreign currencies. In April 2023, Taiwan Bank launched a “dual-currency gold savings account,” enabling investors to benefit from both exchange rate fluctuations and gold price movements.

If you buy in TWD, you bear the risk of USD exchange rate fluctuations (since international gold prices are quoted in USD). If you buy in foreign currency, you face currency conversion costs at purchase. The overall cost is about 1%, representing moderate friction.

Pros and cons of gold savings accounts:

Advantages:

• Small investment amounts are possible
• Very convenient transactions via bank accounts
• Can be exchanged for physical gold later if desired

Disadvantages:

• Only “buy low, sell high”—no short selling
• Trading hours are limited to bank operating times
• Each transaction incurs fees; frequent trading increases costs
• Currency risk exists

Therefore, gold savings accounts are best suited for low-frequency, long-term investors rather than active traders.

Tax-wise, gains from buying and selling gold savings accounts are considered property transaction income, to be reported in the following year’s comprehensive income tax. Losses can be deducted from property transaction income, and any remaining losses can be carried forward for up to three years.

Gold ETFs: Liquidity, transparent costs, and easy investing

Gold ETFs are “gold index funds” that track gold prices without physically holding gold. Investors can choose Taiwan-listed gold ETFs (e.g., 00635U) or US-listed ETFs (e.g., GLD, IAU).

Cost structures of different gold ETFs:

Taiwan ETF (00635U): management fee about 1.15% annually + transaction fee 0.15% + stamp duty 0.1%.
US ETFs:

• GLD: management fee 0.4% + transaction fee 0-0.1% + currency conversion 0.32%
• IAU: management fee 0.25% + transaction fee 0-0.1% + currency conversion 0.32%

Compared to physical gold and savings accounts, gold ETFs offer more transparent and lower costs. They also feature excellent liquidity—buy or sell anytime without time restrictions—making them a major advantage over gold savings accounts.

Limitations of gold ETFs:

• Only long positions; no short selling—if you expect gold to decline, ETFs won’t profit from that.
• Suitable for investors with a long-term bullish outlook on gold.
• Ideal for those seeking stable, passive investment without monitoring daily price movements.
• Easy to purchase via brokers; overseas accounts can also access US ETFs for lower fees.

Gold futures: A professional tool for efficient trading

Gold futures are derivative contracts based on international gold prices. Profits come from the price difference between entry and exit points, with contracts requiring delivery or rollover at expiration.

Core advantages of gold futures:

• Two-way trading—can go long or short to profit from rising or falling prices.
• Long trading hours (overseas futures are nearly 24/7), with prices linked to real-time international markets.
• Leverage allows controlling large positions with a relatively small margin, increasing capital efficiency.
• Low transaction costs: futures trading tax has been suspended; only a very small transaction tax (0.0000025%) applies, almost negligible.

Risks of gold futures:

• Contracts have expiration dates; rollover costs or forced liquidation may occur.
• Holding positions into delivery month risks forced settlement.
• Leverage amplifies both gains and losses—10x leverage means a 10% drop in gold price can wipe out your entire investment.
• Best suited for experienced traders with solid risk management knowledge; not recommended for beginners.

In Taiwan, futures are traded on the Taiwan Futures Exchange with limited trading hours. Overseas futures brokers offer nearly 24/7 trading with higher liquidity and convenience.

Gold CFDs: Flexible small-entry trading

CFDs (Contracts for Difference) track spot gold prices. Unlike futures, CFDs have no fixed expiration or forced settlement, allowing traders to open and close positions anytime, with indefinite holding periods.

Three main advantages of CFDs over futures:

1. Lower entry barrier: No minimum contract size; margin requirements are flexible. Platforms like Mitrade allow trading as little as around $18 for 0.01 lots.
2. No expiration: No rollover costs or forced liquidation; traders can manage positions at their own pace.
3. Flexible trading: Supports long and short positions, 24-hour trading, and adjustable leverage (e.g., 1x, 10x, 20x, 50x, 100x).

Practical application:

On Mitrade, trading 0.01 lots of gold CFD requires only about $18 at current prices. The platform supports TWD deposits/withdrawals and 24/7 Chinese-language customer service, very friendly for Taiwanese investors. Leverage can be adjusted per trade, with stop-loss and take-profit orders available.

Tax and risk considerations:

Profits from international gold trading are considered overseas income. If annual gains exceed NT$1 million, they must be included in the minimum tax base. High leverage also increases risk—CFD trading costs are low, but losses can be magnified. Beginners should start without leverage to familiarize themselves with the platform before increasing risk.

Gold futures vs. gold CFDs: Two key tools for short-term traders

For quick profit from short-term trading, futures and CFDs are the most efficient tools. Key differences include:

In summary, CFDs are more suitable for small capital and beginners, while futures are better for large funds and professional traders. Regardless, solid technical analysis and strict risk management are essential.

Five key considerations before investing in gold

Before choosing where to buy physical gold or other investment channels, investors should answer these five questions:

1. What is your investment goal?

• Long-term preservation and hedging → physical gold, gold savings, ETFs
• Short-term arbitrage → futures, CFDs

2. How much risk can you tolerate?

• Low risk → physical gold, savings accounts
• Moderate risk → ETFs
• High risk → futures, CFDs

3. What is your initial capital?

• Small (<NT$10,000) → CFDs most flexible
• Medium (NT$10,000–NT$100,000) → ETFs, savings, CFDs
• Large (>NT$100,000) → all options

4. How much time do you spend monitoring the market?

• Low (monthly/quarterly) → physical gold, savings, ETFs
• High (weekly/daily) → futures, CFDs

5. How important is tax planning?
Physical gold transactions over NT$50,000 require reporting; overseas CFD gains over NT$1 million are subject to minimum tax; ETFs and savings accounts have simpler tax implications.

Why institutional investors all allocate to gold?

Gold has proven to be a valuable part of diversified portfolios over decades. It’s not just a hedge but also a highly liquid, transparent market worldwide.

During economic turmoil, geopolitical conflicts, or inflation threats, gold acts as a “safe harbor.” This is backed by real market reactions—such as the surge to $2,069 during the Russia-Ukraine conflict in 2022.

Most investment institutions recommend allocating at least 10% of your portfolio to gold. Even if not for profit, gold provides a safety net and confidence.

Final advice on physical gold investment:

Whether buying physical gold, savings accounts, or other tools, the core principle remains—don’t wait for prices to hit all-time highs before entering. Find suitable entry points, set clear investment plans, and stick to disciplined execution. That’s the key to successful gold investing.

For beginners, starting with ETFs or savings accounts is recommended to build experience and knowledge. Once you understand the market better, consider futures or CFDs. The market is always there—no need to rush all in. Build your gold portfolio steadily; time will prove the value of your decisions.