How to buy gold

There are many ways to buy gold. Different products can be used to achieve a variety of investment objectives.

Investors should consider the options available in their market, the form of investment that is appropriate to their circumstances, and the nature of professional advice they will require.

Deciding how to invest in gold involves reviewing the various gold-related investment products The various gold-related investment products, all of which have different risk and return profiles, liquidity characteristics and fees. Typically, an asset allocation strategy will consider long-term versus medium-term returns, and how gold investment products perform in positive or negative correlation with other assets.

 

Buying physical gold (bars and coins)

How to buy gold - Buying physical gold (bars and coins)

Small bars and coins accounted for approximately two-thirds of annual investment gold demand and around one quarter of global gold demand over the past decade. Demand for bars and coins has quadrupled since the early 2000s, and the trend covers both the East and the West. New markets, like China, have been established and old markets, like Europe, have reemerged. 

Buying gold-backed ETFs and similar

How to buy gold - Buying gold-backed ETFs and similar

Physically-backed gold exchange traded funds (ETFs), exchange traded commodities (ETCs) and similar funds account for approximately one-third of investment gold demand. These funds were first launched in 2003 and, as of March 2016, they collectively hold 2,300 tonnes of physical gold on behalf of investors around the world.

Buying into allocated gold accounts

How to buy gold - Buying into allocated gold accounts

Bullion banks and many gold dealers offer their customers gold accounts consisting of gold deposits and resembling currency accounts. When a customer orders gold in grammes or ounces, the bank will buy the gold on the customer’s behalf and electronically book the transaction into the account.  

Buying gold derivatives: futures, forwards and options

How to buy gold - Buying gold derivatives: futures, forwards and options

Investing in derivatives requires more knowledge of financial securities than other forms of investing and may not be suitable for all investors.  

Derivatives trade over-the-counter (OTC) and on exchanges. Derivatives traded on exchanges settle in a central clearing house that matches buyers and sellers. OTC derivatives are bilateral contracts that have more flexible structures but include additional counterparty risk. 

Buying gold mining stocks

How to buy gold - Buying gold mining stocks

Investors can invest in shares of gold mining companies.  Gold mining company stocks may correlate with the gold price. However, the growth and return in the stock depend on the expected future earnings of the company, not just on the value of gold. 

Gold.org does not offer investment advice

How to buy gold - Gold.org does not offer investment advice

This information is provided solely for general information and educational purposes. It is not, and should not be construed as, an offer to buy or sell, or as a solicitation of an offer to buy or sell. See also ‘Terms and conditions’.