Recently, many people have been asking how to invest in gold, so I’ve organized my experience from the past few years to share five methods of buying gold, each with its own pros and cons.

First, let’s talk about the current gold price situation. From last year to this year, gold has been rising continuously, starting from early 2024, it has surged higher and now has broken through $3,700. The main reasons are the Federal Reserve cutting interest rates, escalating geopolitical risks, and central banks around the world actively buying gold. Last year, global central banks’ net gold purchases reached 1,045 tons, exceeding 1,000 tons for three consecutive years, directly supporting the rise in gold prices. Goldman Sachs predicts that mid-year gold prices could reach $4,000.

However, to be honest, short-term gold price predictions are very difficult, as the influencing factors are too complex. If you want to hold gold long-term for preservation and appreciation, the key is to find a good entry point and not wait until prices have already risen to buy in. For long-term holdings, consider physical gold, gold savings accounts, or gold ETFs. If you can bear the risk and want to profit from short-term fluctuations, then learning to analyze the market and using futures or CFDs will be more efficient.

First, let’s talk about physical gold. Gold bars and gold ingots are the lowest risk and most straightforward physical gold options. Where is the best place to buy gold bars? Taiwan Bank is the most reliable choice. Taiwan Bank is the only bank in Taiwan that deals in physical gold, and their gold bars come from Swiss banks, ensuring quality. The minimum purchase starts at 100 grams. If you want to buy smaller amounts, jewelry stores or pawnshops are also options, but be mindful of purity. However, physical gold has some issues: high unit prices, storage needs, transaction fees, and lower liquidity, making buying and selling more troublesome. Tax-wise, transactions over NT$50,000 must be reported for income tax.

Gold savings accounts, also called “paper gold,” are much more convenient. The bank holds the gold for you, and you only need to check your account statement—no worries about the safety of physical gold. Taiwan Bank, CTBC, and First Bank all offer this service. Buying with NT dollars involves exchange rate risk, and buying with foreign currency incurs currency conversion costs from the start. Overall, the costs are similar, and it’s considered a medium level. But be aware, frequent buying and selling can accumulate fees, so it’s not recommended to operate frequently.

Gold ETFs are another option. You can buy gold ETFs listed on Taiwan stocks or on U.S. stocks like GLD or IAU. The advantages are low barriers to entry, easy trading, and good liquidity. The disadvantages are that you can only go long, not short, and you have to pay management fees. U.S. gold ETFs are usually cheaper than Taiwanese ETFs, but you need a U.S. stock account and currency exchange.

If you want higher returns and are willing to take on greater risks, consider futures or CFDs. Gold futures allow two-way trading, have long trading hours, operate 24/7 in sync with international markets, and leverage lets you enter with a small amount of capital. The downsides are expiration dates, rollover requirements, and leverage amplifying losses. CFDs are more flexible, with no expiration date, more leverage options, and starting from just a few dollars. Both tools are suitable for short-term trading but require some trading experience and risk management awareness.

Honestly, the most important thing in gold investing is choosing the method based on your goals. Do you want to preserve value? Or profit from price swings? How much money are you investing? Can you bear the risks? These factors determine which method suits you best. My personal advice is that beginners can start with gold savings accounts or ETFs, as they have low thresholds and manageable risks. After gaining some experience, consider high-leverage tools like futures or CFDs.

Finally, why are so many people investing in gold? Because gold is indeed a good hedging tool. During economic turmoil, wars, or rising inflation, everyone rushes to gold. Institutional investors typically allocate about 10% of their portfolios to gold—that’s the reason. Whenever systemic risks appear, gold prices tend to surge. So, gold can be both a long-term preservation asset and a short-term trading tool.