Recently, I’ve noticed more and more people around me asking how to buy gold, especially during times of tense geopolitical situations and rising inflation pressures. I’ve also researched this topic myself and found that there are far more ways to invest in gold than I initially thought, each with its own pros and cons.

Let’s start with the conclusion: gold is indeed worth paying attention to right now. From last year to this year, gold prices have surged from $2,700 to over $3,700, mainly due to global central banks疯狂购买黄金 (crazy gold buying) — with a net purchase of 1,045 tons in 2024, exceeding 1,000 tons for three consecutive years — and increasing geopolitical risks. Goldman Sachs predicts it could reach $4,000 by mid-2026, so entering the market at this point isn’t too late.

But the key is to choose the right investment method. I’ve summarized five common channels for gold investment, each with different risk and return characteristics.

The first is buying physical gold, such as gold bars or ingots. If you want long-term preservation and collection, this option isn’t bad. Where’s the best place to buy gold bars? I recommend going directly to a bank. Taiwan Bank is the only bank that offers physical gold trading, with guaranteed quality and transparent fees. You can start from 100 grams; for smaller amounts, you’d need to go to a jewelry store or pawnshop. However, physical gold has some hassles — you need to securely store it, pay storage fees, and liquidity isn’t great. When you want to sell, you might encounter the “easy to buy, hard to sell” situation.

The second is gold savings accounts, also called paper gold. I highly recommend this because you don’t need to physically hold gold; the bank keeps it for you, and buying and selling are done via the account. Many major banks offer this, such as Taiwan Bank, China Trust, and First Bank. You can buy with TWD or foreign currency, and there’s also a new dual-currency gold savings account. The costs are moderate, mainly involving handling fees and currency exchange costs, but frequent trading can accumulate significant fees, so it’s more suitable for low-frequency, long-term investment.

The third is gold ETFs, or gold index funds. Taiwan has 00635U, and the US has GLD and IAU. They have low investment thresholds, good liquidity, and are easy to trade, but you need to pay attention to management fees. Taiwan’s ETF management fee is about 1.15% annually, while US ETFs range from 0.25% to 0.4%, with US funds being cheaper. This method is also very suitable for beginners and retail investors, with good long-term performance.

The fourth is gold futures. This is suitable for investors who want short-term trading and have some experience. Futures can be traded both ways, operate 24/7 linked to international markets, and require only margin deposits to leverage profits — but losses can also be magnified. Taiwan Futures Exchange has shorter trading hours, but overseas futures brokers almost operate 24/7, offering better liquidity. Be aware of expiration dates and rollover costs.

The fifth is gold CFDs (Contracts for Difference). I think this is the easiest way to get started. CFDs track the spot gold price and can be traded both ways without physically holding gold or having an expiration date, making them more flexible than futures. Leverage options are plentiful, allowing small capital to start trading. Trading gold CFDs is actually simpler than stock trading — just judge the price trend, no need to pick stocks.

In terms of costs, physical gold has the highest handling fees (1% to 5%), gold savings accounts are moderate (~1%), ETFs and futures are relatively low (0.1% to 0.25%), and CFDs are the lowest (~0.04%). But don’t just look at fees; consider your investment goals. If you’re hedging against inflation or long-term preservation, physical gold or savings accounts are more suitable. If you want to profit from price swings or short-term trading, futures or CFDs are more efficient.

My personal advice is: if you’re a beginner, start with gold ETFs or savings accounts, as they’re relatively low-risk and easy to learn. Once you’ve gained some trading experience and market sense, consider leverage tools like futures or CFDs. As for where to buy gold bars most cost-effectively, it ultimately depends on your investment strategy and risk tolerance. For long-term preservation, buy from banks; for frequent trading, choose financial derivatives.

Currently, gold prices are indeed at a relatively high level, but from the perspective of central bank continuous gold purchases and geopolitical risks, gold’s hedging value still exists. The key is not to chase the high and to find suitable entry points. If possible, consider dollar-cost averaging to reduce costs. Regardless of the method chosen, remember one thing: gold doesn’t generate interest, so short-term gains may not be obvious. But as a hedge in your investment portfolio, allocating 10% to 15% in gold still has its value.